So you want to be a successful small business owner. That means more than just offering a product or service. Small business owners are usually very good at what they do…manufacturing something, providing a service, etc. What is often missing for them are the skills needed to manage the day to day operations of the business. As a result, a significant majority of small businesses fail within their first 5 years of operation, as many as 95% according to some research. The high failure rate is due to the very real fact that the business skills needs for small business owners is high and the available resources for them to develop them are low.
Small business owners are unique in the business world, they don’t always have a team or a staff to help them run their business, so they frequently rely on themselves or others for help. Sometimes that help isn’t what they need so the business owner ends up doing it themselves anyway.
Therein lies the problem, how many small business owners truly understand how to “do all things well” when it comes to running a business? Many don’t and whether they take advantage of a program offered free, a program offered through an educational organization, or self-study, they still don’t get much beyond the basics. Further, many of these are generic in nature or simply a “Big Business” process taught to small business. This doesn’t meet the needs of the small business owner.
Small business owners must find a means to put it all together. Actually learning how to run a business, what tools are available and how to use them, those are more important. Where do you want to spend or invest your precious dollars?
Most small business owners, when building their business, focus on the old adage, “I have to sell more in order to make more.” While this may seem like a true statement it isn’t always so. In fact, without a series of processes in place to make certain your business does what it should, selling more to make more could put you out of business.
One of the things small business owners do toward this goal is confuse marketing with advertising and sales. Small business owners buy advertising that gets them a lot of attention, but unfortunately not necessarily the attention of the right buyers. They are convinced that having their website pop up first is an effort worth their limited advertising dollars without considering just how valuable that service is. They think that TV ad is just what they need, that magazine or newspaper ad is a good idea. None of those are bad, but they may not be the right thing for their specific business.
Running any business, even a small business, is more than simply having a Business Plan that even your bank may not read, a lot of advertising, and a product or service to sell. It is about having a strategy to obtain a steady flow of customers, from multiple sources, to ensure seasonal and economic downturns don’t harm your business. It is about a strategy to upsell to new customers and retain existing customers. It is about a financial management strategy that is more than Profit & Loss Statements or balance sheets.
So, what should you do? Your own financial documents can tell you much about your business, yet they will not always tell you everything, even if you know how to read them. Most often they are a report of what has happened, and not a report of what will happen. Begin by understanding what is happening in your business, understand not only what is and is not happening but why; then understand how that affects the other areas of your business. Be prepared to answer these questions:
• How well are you attracting qualified good, and new 1st time, customers for eventual sale?
• How effective are your sales?
• How much error and waste does your business have?
• How good is your customer service at upselling?
• How well does your customer retention get customers to buy again?
• What is happening with your Cost of Goods Sold and does your pricing truly create a profit?
And a few more…
You don’t need to be an expert, but you need to have good user knowledge of how these work. Find someone, some place, a school, an Adviser, a Consultant or another trusted business owner, to give you the tools, give you the training, coaching, and education on how to use them. Don’t settle, find the best you can, it is your business at stake here. One size fits all programs are not in your best interest, find a true resource. That is what a smart and successful business owner does.
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