5 Keys to Small Business Success

Does that mean that your business is doomed to fail? Absolutely not! Of course, there are no guarantees, but here are five basic steps that can greatly increase your chances of long term success:

KEY #1: THE BRIGHT IDEA
Typically, business opportunities can be divided into four groups:

1. Offering an existing product/service in an existing market.
2. Introducing an existing product/service to a new market.
3. Offering a new product/service in an existing market.
4. Introducing a new product/service to a new market.

Pick one of these models and apply your idea. Having trouble coming up with an idea for your business? The only limit is your imagination. Inspiration can come from anywhere— a hobby that you can turn into a full-time job, a talent you have that can earn you money, or providing a better service than what you always get from your current vendors. Once you have decided what to do, it’s time to examine the market potential.

KEY #2: PASSING THE TEST

Is there a market for the product or service you want to offer? What is currently available? Who are your potential competitors and what do they offer? Do you have the skills necessary to successfully manage a business in your chosen industry?

KEY #3: TO BE OR NOT TO BE?

Gut-check time—Can you make this business work? Do the numbers make sense? Examine closely all of your revenue and expense assumptions. It’s bound to be tough going at first. Can you hold out as long as you need to until your business can afford to pay you a salary? Be critical and honest. You don’t want to jump into something feet first and find out the hard way that the budget just doesn’t work.

KEY #4: LOOK AT ME! LOOK AT ME!

Advertising can be costly so you’ll want to be sure that your advertising budget is spent wisely. That means more market research. Make your best effort to profile your target market and target customer to ensure you aim your marketing at the right group of people, and that your marketing conveys exactly the message you need to communicate to your potential customers.

Up to now, you’ve just laid the foundation. Sooner or later, you just have to get started. So choose a business name, print up some business cards, and get started.

KEY #5: MEASURE IT, MANAGE IT!

It’s a cliche because it’s true: if you don’t measure it, you can’t manage it.

Forecast sales and related expenses, then monitor them regularly. It’s the only way you’ll know when you’re veering off course, and it’s the best way to ensure you have sufficient advance notice to avoid, or at least minimize, future problems.

Don’t confuse profit with cash. Keep an eye on your bottom line and, most importantly, always be aware of your cash flow — the cold, hard cash that you have in the bank. Allow for invoice periods (14 days, 30 days etc) when you’re planning your budget.

Remember that the market place has a life of its own, and no one can prepare for every contingency. Put some thought into your idea; make sure that there’s a market for what you’re offering; research, research, research; promote your business effectively; always know what’s going on in your bank account and don’t forget about cash flow!