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Tips for small business success.
Have a clear-cut strategy!
A good strategy immediately distinguishes your business from those of
your competitors, and gives your customers a solid reason for choosing
to do business with you.
A good strategy should be developed after considering the market,
customer needs, the competition, and your business's relative strengths
and weaknesses. While the strengths of large, established competitors
may seem overwhelming - such as deep financial resources and an
established customer base - any new firm has built-in advantages too,
such as more flexibility and the knowledge of how existing firms have
already positioned themselves in the marketplace.
Many small businesses try to be all things to all people - which is
really having no strategy at all! Even if you do everything else right
... it will be much harder, if not impossible, to succeed in business if
you don't have a decisive strategy!
Test
your advertising!
Having bought advertising in every media from TV to subway cards, and
having sold advertising for the newspapers, magazines, and phone books
that I published, I have seen plenty of successful businesses built
largely on the power of advertising. But creating successful advertising
is a lot trickier than it may appear. Even the largest corporations and
the most prestigious ad agencies find it difficult to create advertising
that consistently works. So whether you're starting a company or
managing an established one, don't spend a lot of money until you are
sure that you have found a marketing mix that works for you!
With whatever advertising method you choose, you can greatly increase
your chances of success with what I call "cheap marketing tricks," such
as new customer specials, coupons, trial offers, events, exclusive
offerings, give-aways, and more. Save the image advertising for big,
rich corporations - small business advertising should focus completely
on leading customers directly to action today!
Follow
a plan and a budget!
Develop a plan before you start your business and update it at least
once each year. A plan and a budget help you attain higher goals than if
you just plugged away at your business one day at a time. If your
company starts to go in the wrong direction, a plan and a budget will
provide an early-warning system and help get you back on track.
You don't need accounting experience to set up a budget - but you do
need to be very meticulous in projecting and recording each expense and
every sale.
Guard
your cash!
As a small business owner, you are going to be fighting a constant
battle to hold onto your cash. Overruns in start-up costs,
lower-than-anticipated profit margins, and sales that grow slower than
expected are among the most common cash drains on new businesses. Even
established, highly profitable, fast-growing businesses often run out of
cash because of the need to finance growing inventories and customer
receivables.
You will also find that well-meaning employees will constantly be
suggesting new ways to spend or invest your precious cash. You are going
to have to pull in the reins and say "NO. NO. NO." to the many different
demands on your money. You need to learn to project cash flow with a
fair degree of accuracy. If you don't become disciplined in controlling
your cash, you can get into trouble very quickly.
Watch your profit margins!
Many small businesses focus to much on sales and not enough on profit
margins. And many under price theirs goods and services. Can you
increase your prices? Even if you can, it's crucial to keep your costs
down!
Let's say you have a profit margin of 5 percent. If you're able to lower
your overall costs by just 5 percent, you can double your profits! But
to raise profits the same amount by increasing sales you would have to
increase sales by 100 percent! A small change in your cost structure can
go a long way toward improving your profit margins.
Treat
your people right!
Virtually all employees want to work hard to help your business succeed.
Treat them right, show interest in them, and compliment their every
success. You'll be much more likely to not only retaining them, but to
keep them motivated too! Otherwise a lot of money and time can be wasted
hiring and training new hires.
Beware
the friendly salesperson!
Once you open your small business, you are instantly going to be a prime
target for every salesperson within calling range. New business owners
often have a hard time saying "No," until they get burned buying
something they don't need. Salespeople are not here to help you! They
are there to separate you from your cash! Chances are that when you are
starting or running a small business, you need your cash a lot more than
you need what they are selling.
Worship
your customers, but don't give away the store!
It is important to create good products and run an efficient business,
but you also need to be responsive to the needs of customers - even when
doing so may sometimes require changing the way you are currently doing
business. Listen to your customers' comments, and do what you can to
give them what they want. But don't give away the store! Be sure that at
least over a period of time, you are realizing a good profit with every
customer, no matter how much they spend!
Have
fun!
Just because many other businesses are boring stale, routine places to
work doesn't mean that your business has to be too! Make work fun,
exciting, and challenging for your employees, and you'll find that in
addition to happier people you'll have less turnover and higher
productivity. Besides - you just might have a little more fun too!
Common sense!
Last but definitely not least, use common sense in every decision you make.
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