Are you a small business owner? Are you thinking about starting a small business? If you answered yes to either of these questions, then there are some things that you need to know. Statistics show that 95% of small businesses fail within the first 5 years of operation. I consider this number to be quite high, though probably not too far from accurate. The good news is that with the proper ingredients, you can be one of the 5% that succeed. Think of it like baking a cake. If you don’t include all the right ingredients, your cake won’t rise. The same applies to your business. Although every business has its differences, there are 10 ingredients that every business should share.
1) Product/Service
Of course, you must have something to sell. Whether it’s a product or service, this is the most important element of your business. The most logical choice would be something that you know or that you do best, and something that you enjoy. You cannot start a business just for the sake of having a business and you cannot effectively sell something that you know very little or nothing about. If you don’t know your business, it won’t take long for your customers to find that out.
2) Business Plan
Every successful business, no matter how large or small, starts with a plan. A Business Plan will help you plan your strategies and map your directions. Without a clear and concise plan of action, it’s easy to lose site of where your business is headed and where you want it to go. Once you’ve established your business plan, stick to it as much as possible. In my opinion, the best and most user friendly program on the market for writing business plans is Business Plan Pro (http://www.palo-alto.com). I have had great success with this software. I’ve even had up to $300,000 dollar loans approved based on plans that I’ve written using this software.
3) Desire/Determination
Owning a business (no pun intended) is serious business. Owning your own business is a far cry from working for someone or even running someone else’s business. As a business owner, everything that affects the business, affects you. If you’re like most of us, you’re putting all that you have into your business. Owning a business can be quite stressful, and sometimes you might even question whether it’s all worth it. Believe me, it is. But that’s where your determination and desire kick in. Being knowledgeable about and enjoying what you do also helps. If you enjoy what you do, the difficult days aren’t so bad. I’ve found that a daily dose of motivation works wonders. A good source for daily motivation is (http://www.greatday.com). You can even subscribe to have your messages emailed to you daily.
4) Customer Base
Of course, if you don’t have customers, you don’t have sells. Decide who your customer base will be and go get ’em. Your customer base should be the people your business will appeal to. If you have a landscaping company, then your customer base would be people who own homes. A person living in an apartment would have no need for your services. Knowing who your customers are is very important. Not only does it allow you to cater to their specific needs, it also gives you an opportunity to increase your sales by providing add-on services.
5) Internet/Web Site
I cannot emphasize the importance of this ingredient. Being in business and not having a web site is equivalent to not having a telephone in your home. In the near future your success on the internet will determine your success in business. But just having a web site is not enough. Your web site should be professional, informative, and easy to use. If it is not, you WILL lose customers. There are too many choices available to customers and they will not spend time trying to figure out your web site. They will simply move on to someone else. I highly recommend (http://www.thewebweaver.com). They do extremely professional work and at an unbelievably reasonable cost. If you’re looking for somewhere to register your domain name and have your site hosted, try (). They offer free hosting and their cost for domain name registration is the lowest I’ve seen.
6) Advertising/Marketing
For your business to survive, people have to know that you exist. Every successful business must do some form of advertising or marketing. Most small businesses don’t have much to spend on advertising. Fortunately there are options that offer free or minimal cost advertising. Two very good resources for Internet marketing advice are (http://www.bizweb2000.com) and (). Be sure to test and track your advertising to see what works and what doesn’t. Of course you don’t want to spend time or money on what doesn’t work. You should have established an advertising budget in your business plan.
7) Customer Service
No matter how many customers you get, if you don’t take care of them they will leave, and most likely they won’t be back. Even worse, they might tell others not to do business with you. I, like many others, truly believe that the most potent form of advertising is “word of mouth”. Unless you have a unique product or service that only you provide, you have competition. Your level of customer service can make the difference in someone buying widgets from you or buying them from someone else. Make each customer feel as though they are your most important customer. You’ll find that they will return and, in most cases, they will also send others to you. Be sure to answer EVERY email and EVERY call promptly.
8) Employee(s)
Every business has to have employees, even if it’s only one. No business can run itself. This is very important to remember. You must run and handle your business professionally. Some small business owners, especially home based businesses, seem to forget that it’s still a business. Establish your hours of operation and stick to them. I see all kinds of advertisements encouraging us to automate our businesses, but be leery of this. It is definitely a good idea to simplify things as much as possible, but there is no such thing as automatic pilot for a business.
9) Accounting/Finance
Every business must have a system for handling finances. There must be a process for receiving and disbursing money. If you have a web site, accepting credit cards is a must. If you have or plan to have an affiliate program, you have to establish a way to pay your affiliates. You must also consider how you’ll pay vendors, employees, and other payees. One of the best and most user friendly small business accounting packages is QuickBooks (http://www.shopintuit.com). Be aware that small businesses experience a high occurrence of employee theft. Be sure to implement security measures in your accounting system.
10) Legal Protection
I saved this one for last because it is one of the most important ingredients, but probably the least thought about. Law suits are running rampant and with the increasing popularity of the Internet, legal issues are even more complicated. Businesses close every day due to legal issues. No business wants to endure a lawsuit, and most small businesses can’t survive one. Even if you’re found to not be at fault in a legal situation, you’re still responsible for your legal fees. What’s the going rate for a good attorney? How about $150 to $300 dollars an hour. Fortunately there is a way to avoid this. Now there is a service available to small businesses that provides them the same access to attorneys and business professionals that large corporations have, without having to pay those outrageous fees. You can access the service at () or (). It provides small businesses with unlimited telephone access to attorneys, debt collection, contract and document review, access to business professionals and consultants, and a host of other services. They even offer an individual and family plan, as well as a plan for your employees, and all for pennies on a dollar. It’s the best value I’ve seen in a long time.
Owning a business is not the easiest thing to do, but it is not the most difficult either. No one can guarantee your success in business, except you. Your success is totally dependant upon you and how you handle your business, but utilizing these 10 ingredients improves your chances. Your business cannot survive without them. One thing I’ve found is that, if you take care of your business, it will take care of you.
Debra has worked in business management, finance, and
accounting for over 18 years. She has been involved in Internet
Marketing for over 4 years.
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