There is no single magical formula for success in small business, knowing the basics and doing them well will maximise the chances of survival. Following these steps will help to lower the inherent risks of starting a business, and should be incorporated in your business planning process.
1. Create and build the business for a real market opportunity:
Find a business opportunity with as many customers as possible, and as few competitors as possible. Conduct a feasibility study as to whether there is a market for the product or service on which you intend to build your business. If there are not enough customers, or the customer base isn’t likely to grow (or be maintained), then the viability of the business must be in doubt.
2. Gain experience in the type of business plan to start:
Experience is not the only way to learn, but it is still the best teacher. Combine experience with a developed distinctive competence that can be turned into a unique product or service, this could be something different, or better than is being provided by your competitors.
I always maintain that it is always best to make the mistakes working for someone else (as an employee), before you decide to got alone in your own business.
3. Be sure you have your family’s support:
If your family is willing to provide the emotional support you need during the start-up period, your chances will improve dramatically. The impact of uncertain income, demands on your time and attention, and the sheer activity of being the responsible owner of a small business will put strains of the best relationships.
4. Continually work to improve the business image and product or service:
Be innovative in order to maintain your competitive edge. Forward planning and the continual search for new opportunities and improved ways of running the business are essential.
5. Strive to be the best rather than the biggest:
Work towards moderate growth in the early stages of your business in order to ensure proper cash flow and profits, rather than undermining the resources of the business with uncontrolled growth.
6. Build on strengths and concentrate your effort and resources:
Do one or several things very well, rather than using up all your effort and resources by trying to be all things to all people. Become an expert and an authority in your field of activity.
7. Stick to what you are good at and use expert advice:
A great deal of technical, business and management support is now available from professional advisers. If this is out of your financial reach then search for the information on the Internet.
8. Recognise the different types of risks in operating a business:
There is the risk of actually being in small business, these are the risks we can afford to take, the risks we cannot afford to take, and the risks we cannot afford not to take.
9. Avoid being overly dependent on others:
Grow the sales base to have as many customers as possible, rather than relying on too few customers for a large proportion of total sales. Establish alternative or backup suppliers.
10. Look after the true-value customers:
Draw up a list of valued customers and clients, give them an ABC rating or whatever method you choose to identify them by. Remember always of course that in terms of business practice they should al be treated the same, the trick is to make some special offers or discounts for your true value customers.
You will find over time that it is the the true value customers that refer you to others so look after them. Send them something special from time to time, highlight their anniversary of dealing with you for example, and offer them something with a good discount, or send them a hamper of goodies for example at Christmas or any special day.
11. Do not persist with products which have become obsolete, unfashionable, or have been superseded:
With good planning, some products/services should become available in anticipation of discarding the old ones.
12. Manage the business resources efficiently and effectively:
These resources comprise cash, funds, people, physical assets such as plant and equipment, time, and information required to make informed decisions.
13. Be decisive and assertive:
Strong and effective leadership is essential, because every business and management decision made will affect the business’s ability to survive.
14. Use time efficiently and effectively:
Time is the only business resource that is totally limited in supply. Don’t get bogged down in trivial detail and lose sight of the important issues in operating a small business.
15. Consider cash flow to be the lifeblood of the business:
Strong liquidity should be maintained by using budgets, monitoring the profits, controlling credit sales, carefully managing inventory levels and maintaining minimum overhead costs. Remember always that Cash is King!
16. Keep accurate up-to-date records:
These should be comprehensive, clear readily available, and appropriate to your needs, yet concise and meaningful.
17. Select employees with care:
Make sure your recruitment policies are sound to attract and maintain the best staff. Maintain their motivation, monitor their individual productivity and meet with them regularly. You must always strive to – attract, recruit and retain the best people you can!
18. Be prepared to become tired and discouraged:
Stamina and persistence are important. Starting a business is difficult. You must provide the impetus to get things going and keep on going. The consistent commitment of energy can be draining, but this is essential in the early stages of your business.
19. Follow your strengths and interests:
These will sustain your enthusiasm. If you like selling, but hate bookkeeping, hire a bookkeeper so you can do what you like to do in the business. One reason for going into business is to be able to exercise your favourite skills and interests, this will help maintain the motivation in your work.
20. Don’t be too proud to quit:
If your idea doesn’t feel right, don’t press on just because you don’t want to be seen as giving up. Maybe you are able to modify the start-up plan, or overcome whatever doesn’t feel right, that’s fine, or you can seek outside help with your business direction.
There’s a big difference between being persistent and being pigheaded. If the business idea continues to raise more doubts and worries, it may not be the right idea for you.
Be prepared to abandon your business idea if the facts tell you it makes sense to do. The whole idea of planning is that is that it reveals warning signals early enough.
21. Believing yourself and your business:
If you’re not totally committed to succeeding in your venture, then you are probably better off out of it. Small business is an enterprise which leaves no room for half-heartedness you must give it your all.
22. There are no road-maps to successful start up:
There are no shortcuts to success either, however, if you pay attention to your personal goals and desires, and make sure your business goals are always reflected, and proceed carefully, you will greatly increase your chances for success.
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