A Small Business Must Have a Solid Foundation
We all know that a building has to have a strong foundation if it is to survive, so, too, a business.
There are many planks that support a business but there are four corner-posts that bear the most weight?
The four corner-posts are Marketing, Selling, Production and Financial Control. There are a multitude of other aspects which helps to make a business profitable. For example, customer service, adequate capital, and location.
But I can guarantee that if a firm is failing in any one of marketing, selling, production or financial control the business will fail.
And that's the chief difference between a small business and a big business. A big business has whole departments to oversee each of those functions and it has people who do nothing else but make decisions (manage).
You must carry out all four functions and manage at the same time.
I have been counseling in small business for 30 years and still find people who do not know what marketing is.
At seminars I ask about their marketing and it almost certain one or more participants will say, "Well, we advertise in the local give-away newspaper". Advertising is not marketing. It's only a tool of marketing.
To use any marketing tool you must know who your target is and you must know what you're selling.
Your customer is not buying a drill. He is buying a hole! I do not know who first said this and it has been around for at least 40 years. It sounds simplistic and hackneyed but it is really a profound observation.
I don't think that girl is really buying a hole. She may be buying independence; the ability to hang pictures, put up curtain rods without having to rely on her male partner. The features and benefits which appeal to her will be different to those which influence a builder.
So if you are hazy on marketing you've got a lot of reading to do to get up to speed.
We all know what selling is?don't we? Well perhaps not, because most small businesses do it badly?or the owner does it but the staff has not been trained to do it.
"Do you want fries with that?" has been made famous by a well known take-away. We call that up-selling .It was a very successful tactic which increased sales of fries etc. but it is starting to lose its edge.
Several times on recent visits I have been asked whether I wanted fries when I already had fries, or did I want desserts when I already had them. That gives negative vibes. They are not really thinking of helping me. They are just trying to increase sales.
This applies to both manufacturing and retail establishments. You have to 'produce' your product but you must do more than that. It must be produced at the location, at the quality, at the time and at the price that your customer wants.
A restaurant had their production down to a science but the waiting time between sitting and having the order taken was 45 minutes. I would have left long before. I am never that hungry. They are now out of business.
A kitchen renovator had a unique quality product and used an excellent installer. His price was very low compared to others in the area. They are now out if business.
You can produce low quality items at a low price and a high quality product at a high price, but you will lose your shirt if you try to sell low quality products at a high price or high quality items at a low price.
For some reason this is the area in which most small businesses fail.
One reason is that bookkeeping is a skill that can be easily learned (especially with all the accounting packages available). Accounting, however, is a discipline that requires 3 to 5 years of study and a lifetime of learning.
Yet the small business owner tries to do it all himself at the same time as all his other functions. Or he leaves it totally to his 'girl' who cannot do it either.
But the success for any task is reliant on the ability to measure every important aspect. In a restaurant we measure the value of wages against sales for the same period. Is your wages 45% of sales? That's too high. Let's work out how we can reduce it.
"We put 50% on our purchases to arrive at a price". That means your gross profit margin is 33% but your financials show that you are only achieving 29%. Let's do something about it.
A compromise for the small business owner is to have a professional accountant design an easily kept system that will produce the information required. Then your 'girl' can be trained how to operate the system.
Most Businesses Fail
Only about one in ten businesses do really well and makes some money for the owner. Your's won't be one of them unless you can get the four corner-posts right.
Author, Kelvyn Peters is one of Australia's longest serving Tax Agents. He was registered in 1962 and became a CPA in 1964.
Kelvyn served on many charitable boards including St Aubyns Hospital, Alzheimer's Association and Older Peoples Advocacy Service.
As a young man he won the Outstanding Jaycee Award three times. He's a compassionate, generous man who loves people. That's why he is so skilled at helping people in trouble.
Kelvyn Peters was Mayor of Kingaroy Shire Council from 1982 to 1987 and campaigned as the 'Young Man of Action'. Over 20 years later he still calls himself a 'Young Man of Action'.
He is a director of Restaurant Catering Qld Inc the peak employer body in Queensland, and has advised the hospitality industry for many years. His specialty is moving in to rescue a sick business. Kelvyn has spent over 20 years experimenting and researching methods to help small business.
He has perfected it with local clients. Now he is going global and he is only an email away.
Nevada Incorporation: The Advantages of Incorporating in Nevada
Incorporation in Nevada has become an attractive option for savvy business entrepreneurs, and for good reason. Nevada corporations enjoy many benefits just not available anywhere else. We will not only investigate why this is so, but you will also know what to be aware of when incorporating in Nevada, and how to avoid the most common first-time mistakes.
Outsourcing and Virtual Assistants: Small Business Saviors
Work smarter, not harder
Winning in Business - Lessons from Lance Armstrong
Lance Armstrong this week won an unprecedented 7th Tour de France victory, confirming him as one of the greatest cyclists of all time. The fact that he won more Tour victories than anyone else in history is remarkable. But more incredible is that had to overcome life threatening cancer to dominate the Tour de France like no other athlete has ever done. From the Lance Armstrong story, there are many lessons we aspiring business champions can learn.
Do You Make These 7 Deadly Cash Flow Mistakes?
Managing cash flow is every small business owner's most important function. Avoid these seven deadly mistakes to make sure you aren't creating cash flow problems in your business.
Home Based Franchise Case Study
Here is an interesting case study of a company, which franchised mobile car wash units. It started with the humblest of beginnings indeed. I can say that with complete knowledge because this is a company I started at age 12 years old. It was not until I was nearly 32 years old that we franchised my business. This franchise was great in concept but franchisees would not follow the system enough, they deviated from the plan in most cases. The franchisees that stayed with the plan did very well, the ones who did not, did okay, but could have done better.
Five Tips for First Time Entrepreneurs
It seems so long ago that I started my first business. Since that time, I've created several successful businesses and learned a lot of lessons along the way. There are several things I wish I would have known in the early days of my entrepreneurial efforts that I hope will help some other first time entrepreneurs on their path to success.
How to Bond a Business Relationship
When should you create a foundation in order to solidify a business relationship?
Freelance Tips: How to Cope with Spring Fever When Theres Work to Be Done
We all know how glorious those first warm days of spring feel. The trees are blooming, the birds are singing... boy, it's sure hard to keep your head out of the clouds when the skies are blue and the sun's shining brightly.
How Micro Loans Can Mean Macro Success for Your Business
"Inch by inch, row by row...that's the way my garden grows" was a favorite saying of my grandmother's -- usually when she was trying to teach me something about patience!
Mini-Blind Cleaning Business, Case Study
Sometimes the simple businesses are the ones, which make good money. Take mini-blind cleaning for instance. There are many successful small time entrepreneurs out there cleaning mini-blinds. Having been in the franchise cleaning business for some time, I often noticed exceptional entrepreneurs out there.
Retail Customer Opportunities for Pressure Washing Companies
Pressure washing companies must look for customers in the retail industry to make sure they stay busy. Large Box Stores and Grocery Stores are often you best customers in that regard. Cleaning concrete or doing "flat work" makes sense for a number of reasons, 1.) It is not labor intensive like washing trucks; 2.) Routine scheduled customers make the work extremely easy; 3.) Generally you do not have to worry about not getting paid for work completed, as the corporate offices will pay you, even if they are sometimes a little slow to pay.
How to Prepare for Your Start-Up Venture!
When you awoke this morning, you found yourself buzzing with a fantastic idea for starting a new business and you hadn't a doubt in your mind that you could turn it into a huge success. But now what? All those great ideas floating around in your head and you're excited about making them happen, but at the moment you don't know where to begin. What is the first thing you should do as you contemplate your plan of action?
Pressure Washer Concrete Cleaning Equipment
Cleaning concrete is tough and there is an easy way and a hard way. There is one thing you need to understand when you are pressure washer cleaning concrete; the concrete cannot always be made to look brand new again after it has been stained. You can always get stains lighter or bleached but completely removing it is very difficult, sometimes you get lucky, but if you are looking for perfection, chances are you will be underwhelmed. So when talking to customers let them know up front and explain this to them otherwise they will be asking for a job that just can't be done unless the entire concrete slab is ripped up and re-poured.
Genius Time? It Matters
I frequently give presentations at small business gatherings, providing me the opportunity to have engaging conversations with owners about the challenges they face. Based on their input, the economy continues to plug along, heading in the right direction, and distancing itself from the difficult journey of the past few years. However, the resulting business climate is considerably different than before, with greater competition and higher customer expectations. Success as a small business owner requires maximizing your daily productivity, so you can focus more on the big picture and less on the many things that eat away at your day.
Small Business and Over Regulation
Over regulation of small business is so intense it is getting hard to make a buck.
How to Wash Mobile Homes as a Business
Washing manufactured homes, mobile homes, can be a lucrative and steady business. Generally Mobile Home owners desire to have their mobile homes washed twice per year. There are many mobile home washing companies who make a very good living and have multiple rigs running. If you currently own a pressure washer you may wish to consider a new business washing mobile home and manufactured houses.
Naming Your Business: 3 Tips To Ensure Success
If you are just starting your business, or if you have just developed a new product or service for an existing business, one of the first questions you need to answer is, "What should I name it?" And while you may feel pressure to make this decision quickly, I caution you to not make it lightly. What kind of things should you take into consideration when choosing a name?
Electronic Franchise Disclosure and E-Signature Future for Investors
It has been discussed allowing Franchising companies to electronically disclose franchise documents to the public and prospective franchisees. If the Federal Trade Commission wants to make UFOC information available electronically through email to catch up with the newest technologies then it will get complaints and make up another rule saying no unsolicited UFOC maybe sent through email.
Grab Your Consumers Attention in a Cluttered World of Marketing Communications
A cluttered world of marketing communications diminishes the ordinary. The consumer can no longer be bother with the dull, trite and a boring hodgepodge of marketing communications that are pandered in front of them every day. They simply haven't the time, nor are they willing to figure out what irrelevant messages warmed over with pseudo-showmanship the marketer is selling them.
Can Your Business Run Without You?
What would happen if you decided to take an extended vacation? Would you still have the same business results when you returned?
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