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Further
Reading ...
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Ideal Marketing Methods for Home-Based Businesses - Vishal P Rao
What is the difference between a small business that makes it and one that does not? Most likely, the one that was successful engaged in some effective marketing. Wise marketing is critical for owners of home-based businesses for a number of...
Ecards as a marketing tool - Dessy Oundian
As any successful businessman will confirm, having a great product or service is just the beginning. After all, in this day and age, everything comes down to marketing. The more creative you are in your marketing efforts, the more successful your...
Monday Morning Mindfulness 08/23/2004 - Sandra Schrift
Welcome to Monday Morning Mindfulness . . . to my Clients, Colleagues and Friends. Join me every other Monday in getting motivated and inspired to act/think/feel something differently. 1. ON SPECIAL OFFERS AND INVITATIONS Would you like to...
Personal Finance 101 - David Berky
The subject of personal finance is very broad, but as a beginning, I would like to discuss what I consider the foundation of personal finance: security. Security Security to me means that I am prepared for the "hit by a bus" scenario. I have...
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A PRACTICAL GUIDE FOR SMALL BUSINESS SUCCESS
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Written By:
Gopi Nathan
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Entrepreneurs who start a small business have high hopes of big
success. Yet few small businesses survive beyond five years.
Actually, there are just four broad requirements that can almost guarantee your small business success:
- A few personal traits essential for small business success
- A big enough market that a small business can tap
- Planning and organizing
- Monitoring and controlling
PERSONAL TRAITS ESSENTIAL FOR SMALL BUSINESS SUCCESS
People with very different personalities have succeeded in
business. Hence, one cannot say that there is an entrepreneurial
personality.
But there are certain traits that are essential for business
success. The traits listed below are practically self-evident:
- A self-starter - This is the essence of entrepreneurship.
Employees have a boss to tell them what to do and how to do it.
Entrepreneurs must decide what to do and learn the how.
- Persistence - Unless you are able to persist against all the frustrations and adversities that are inevitable while doing a competitive business, you are not likely to see small business
success.
- Learning through doing - Without observing the results of
your decisions and actions, and learning from your mistakes and successes, your persistence might actually make the situation
worse. You might be persisting with wrong actions.
- The habit of planning and organizing - If you don't have the
habit of working out the details involved in achieving what you
want, and then going out and organizing all that is needed, you
might be floating around aimlessly. Aimless activity do not
lead to small business success.
A MARKET THAT A SMALL BUSINESS CAN TAP
There has to be a market for what you plan to offer or there
will be no business. Next, existing competition in this market
should be something that you can handle or you will find
yourself driven out of the market.
Whether the market is competitive or otherwise, you simply have
to know your customers. If you don't know such things as their
age, gender, occupation, needs, likes and dislikes, you simply
cannot hope to write sales messages that will appeal to them.
Then you'll need a clear idea about what your customers expect
from your kind of product or service. These customer expectations
will form the basis on which you develop your sales messages. You
can also gain a competitive advantage if you can meet any
expectation that isn't currently being satisfied properly.
Finally, you have to know the places your customers frequent, the materials that they read, and the programs they attend or listen
to. You communicate your sales messages to the customers at these places, or through these materials or programs. Select the most appropriate medium to communicate.
PLANNING AND ORGANIZING FOR SMALL BUSINESS SUCCESS
Although a bit of forecasting is involved in planning, plans
are primarily an expression of your vision. You have some ideas
about the business you want to do, the results you want to
achieve and the way you would go about these.
Business planning involves evaluating these ideas against the prevailing business realities, including the market, the
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/>resources required, and the resources available to you.
The plan also needs to include an estimate of outside assistance
that you will need. It will explain your background, what you
plan to do, as well as the resources requirements and how you
would arrange these.
Another key component of your business plan would be the program
for achieving profitability - how you will achieve required
volumes, the prices you will be able to charge, and the costs
you will incur.
An essential element of the business plan would be estimating cash flows. Initially, there would be cash outflows for establishing the business.
Once operations start, there would be cash inflows from sales.
However, until the sales reach a certain level, the inflows would
be insufficient to cover all the outflows. There would also be the problem of credit - the credit you receive could be less than the credit you have to extend to customers.
A cash flow statement showing inflows and outflows month by month, incorporating all the above factors, would show how much external financing you would need and when. The same statement would
indicate when you would be able to repay the borrowings.
Plans alone would achieve nothing. It is organizing that creates
the business. With the clear ideas provided by the plans, you go
out into the world of government, investors, bankers, suppliers
of equipment, merchandise and services, employees and customers.
You would work with them to translate the plans into an operating business.
MONITORING AND CONTROL OF YOUR SMALL BUSINESS
You have the plans telling you how to achieve profits. Now you
have to compare your actual performance against the plans:
- Are costs within allowable limits?
- Are sales growing at planned volumes and realizing
estimated prices?
- Are credit sales being collected in time?
- Are unsold stocks accumulating?
- Is there any significant change in market conditions?
Inevitably, there will be variations between planned and actual results. Your task then becomes identifying the factors that
caused the variance and taking the necessary actions to ensure profitable operations.
For example, if costs increase, you might have to increase your
selling prices. If local demand declines, you would explore new markets.
Effective control is exercised not by bossing people around, but
by setting standards, checking performance against those
standards, and taking appropriate action in time.
CONCLUSION
Small business success is achieved by:
- Assessing yourself to improve your success traits
- Assessing the market for demand and competition
- Meeting customer expectations and publicizing this fact
- Making detailed plans and implementing these effectively
- Controlling performance through monitoring and timely action.
About the Author
Gopi Nathan is a qualified management accountant who worked in
finance positions before starting out on his own as a computer applications developer. He is the publisher and webmaster of [url]http://www.smallbusiness-start.com[/url] that discusses how to
start a small business right.
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| _Additional Resources ... |
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Tuesdays Were Bad. Now They're Up 122%. - Richard Kraneis
Tuesdays were bad. I just checked my sales statistics using Excel and pivot tables (more on that later). Over the first 40 weeks of this 2004, I increased sales for my “bad Tuesdays” by 122%. I used Microsoft Excel to compare the sales for my...
Cross Cultural Gift Giving Etiquette - Neil Payne
Within the interdependent, global and multi-cultural marketplace of the 21st century, cross cultural differences in the approaches to and practices of business people across the world are important to learn. A lack of cross cultural understanding...
Keeping Stone Floors in Tip Top Condition - Edward Green IICRC inst
I had a customer call me to make a complaint about the Limestone floor we had restored and sealed for them. The building is a state of the art facility in the heart of Covent Garden, in London. The problem was as an up market serviced office block...
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