When starting or running a business, the key thing is always to start with a clear vision and a plan and to make sure that you stick to this along the way. No one can claim to have the magic potion that will determine success or failure, but there are some critical factors that need to be taken into account that can drastically affect your chances of getting it right. When it comes to business success in its most basic form, it’s all about the how and the why of taking action, and always being clear about which steps to take next.
To help this process, here are 10 essential things you need to know about running a successful business. This can be used as a checklist to make sure your thinking and your business plan are on the right track, or if you need to get more information, strategic education or clarity for yourself on your overall vision, your market, or your product or service.
- Offer what people want to buy, not just what you want to sell. Often, people jump into a business built around a product or service that they think will be successful, rather than one that is already proven to have a market.If you go too niche, you run the risk of not having a market at all whereas if you make inroads into a category that interests you, offering the more basic products in that category but also some of the more high end goods, you are more likely to succeed. It’s better to have a small slice of a large category than a large slice of no market at all – no matter how good you think the idea is!
- Make cash flow a priority. One thing is for certain, cash flow is the lifeblood of business, and it is absolutely essential to consistently feed bottom-line profits. The key to any successful business is to find ways of getting cash flowing immediately.Simple ways of making this happen. In a services business, you can ask for deposits on work up-front, with balances due on delivery.
You can do the same in retail, especially on high-ticket or specialty items and position it as an added value and a way to insure delivery by a specific date.
Another clever way is to add value to generic items by creating private labels, and develop continuity programs where customers pay an up-front monthly fee to insure delivery or availability of items they will buy on a repeat basis.
What is key is to make sure there is little or no gap between when you pay for labour, stock inventory and when you actually get paid. Ideally, you’ll find ways to get money up front, and your cash gap will never be an issue.
- Continually look for ways to keep costs low. All the cash flow in the world is worthless if it’s not positive cash flow, which means you have to bring in more cash than you pay out.To do this, you need to keep your costs and expenses low. Simple ideas like never paying retail prices and looking for ‘experienced’ items with which to furnish your offices – all of these things go a long way to keeping costs down.
You too can get discounts from vendors by paying up front. It pays to do some extra work and research now to discover how owners and vendors are finding ways to work out deals, and you just may hit on whole new ways of doing business.
- When planning, always overestimate expenses and underestimate revenues.Business owners and entrepreneurs all agree that they have generally underestimated start up and running costs and overestimated profits in those key first years of business. Being conservative in your numbers doesn’t mean you are willing to accept those numbers, it just means you are arming yourself with information you can work with and work over. It means you can gauge the kinds of efforts and activities you will need to put into sales and marketing.
- Make sales and marketing a focus. In business, nothing happens until a sale is made. From the start, you’ll need to find a good way to get leads, convert leads into sales, and make sure you keep getting repeat sales from your customers. Marketing and sales is key to this process.
Many entrepreneurs focus on getting their brand right before they start to generate leads. That is exactly the wrong way to go about business. Leads are always more important than your brand, so don’t waste money getting your brand right at the expense of spending that same money to buy new customers.
It’s far better to build your brand from the ground up because building it from the top down can be costly and time consuming. At the end of the day – the only truth is that without sales, you will not survive.
- Find ways to increase profits.Most agree that there are five basic drivers that will lead to increased profits and it’s as simple as getting more leads, converting more leads into customers, increasing the number of times those customers buy from you, increasing the average price point of your sales and increasing your profit margins.
Any business that does any one of those, while also keeping costs down, will see more profits. Businesses that do all of them will see exponential growth.
- Test and measure everything.
If you are not measuring, then you don’t know what’s working. Faithfully tracking and measuring results is essential as it will ensure that you do more of the good stuff and let go of the bad stuff.
- Embrace the fact that learning more equals earning more.What many business owners forget is that learning always comes before “earning”. If you really want to succeed, you’ll need to be committed to learning as much as you can about sales, marketing and operations if you want to have a truly successful business.
What is great about it though, is that once you do that, the sky is the limit. Identify areas within your business acumen that are lacking and you can then decide to learn it yourself or hire an expert and learn as much as you can from that person – this might just be the answer to taking your business to a new level of success.
- Don’t discount, add value. Whenever you discount, you are taking money directly out of your pocket and directly from your bottom-line profit. So don’t do it. Instead, create added value propositions all the way up and down your product or service line.Whatever the industry is, look to hold your price points, increase your margins with the low-cost or no-cost extras and any kind of free/value added offerings.
In the end, those little things won’t cost you a lot, but will build up tremendous goodwill and word-of-mouth with your customers and customer base.
- Invest in a coach. Even if you don’t get a business coach at first to help you and guide you in your planning and operation, get someone who is objective and outside of your business that you can rely on for nitty gritty business advice and to hold you accountable for getting results.Too often, we think we have all the answers and are the only people who can really get things done. The reality is that another set of eyes can work wonders for how you operate both on and in your business. An outsider can also make sure you are getting the numbers you need both on the top line and the bottom line to survive.
Hopefully this initial checklist will be valuable in helping you to clarify your thinking and prioritise some activities in your business, whether it is in the start up or planning phase. Ultimately, success is about being as prepared as you can be, but also knowing and accepting that you will need to make changes and corrections along the way.