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How to Run a Successful Business
Running a small business is no easy task. The reality is that with more and more competition at all levels, self employed people need to be flexible as well as they need to have good organizational and planning skills. Many business owners ask me, how to run a successful business?
One of the big mistakes many people do when they are considering opening their small business is that they believe that they just need to open their doors or turn on their computers and they will immediately start making money. This just couldn’t be farther from the truth.
The reality is that running a small business involves a lot of planning, action, and also adjusting the plan to meet current market conditions. For example with record low unemployment rates, business owners need to be creative in finding and keep good employees.
How to Run a Successful Business
Here are 7 essential things that you need to know about running a successful business:
#1: Don’t Offer People What You Want To Sell
Instead, offer people what they want to buy. One of the big mistakes some self-employed people make is that they prioritize things in a wrong way. Instead of focusing on what already sells and has a market, they just try to create a market for their own products or services.
Think about sports shoes, for example. With more and more people exercising every day, you know that you may achieve success if you decide to sell sports shoes. However, instead of just concentrating your efforts on the latest trend designs, you should rather focus your energy on selling all kinds of sports shoes (or even shoes in general) first. Then, as you gain trust, credibility, and customers, you can also include these latest trending sports shoes.
#2: You Need Cash Flow Urgently:
Even when you have a small budget, you know that you need cash flow so you can run your business. So, what can you do?
While this doesn’t work the same way in all industries, there are some industries where you can ask for deposits or even full payment on work up-front with balances due on delivery. Another option that you have in case you’re in the retail industry is to ensure delivery by a specific date on high-ticket items. Think about Dell Computers and Amazon; they don’t schedule anything for delivery until they are paid in full.
Another option that you have is to create a program in which your customers pay an up-front fee to make sure they have all their items delivered by a specific date.
#3: Keep Your Costs Low:
One of the main secrets of successful small businesses is they keep their costs as low as possible. Even when you manage to have cash-flow coming in, you need to maintain it positive; that you are paying out less than what is coming in.
There are many things you can do. From decorating your shop or office with second-hand furniture from paying your vendors upfront which gives you leverage when you are negotiating prices. Just be creative and you’ll be able to think about many different ways to cut the costs. Bootstrapping is a practice that wise business owners use to keep their debt low and therefore profits higher.
#4: Underestimate Your Revenues And Overestimate Your Expenses:
One common mistake among small business owners who are just starting out is to think that they will have enormous revenues and small expenses. They define their business plans according to this optimistic outlook. However, what occurs most of the time is that your revenues will be lower and won’t occur as fast as you imagine. In addition, you may be surprised at the number of expenses that a small business needs to maintain.
As a rule of thumb, you should consider that when you are estimating your expenses, add about 30% more to what you are anticipating. This will ensure that you’re counting with the worst-case scenario and that you’ll still have a way to stay in the business.
Please notice that this is how you should look at numbers but this isn’t how you should think about your business. Particularly if you are opening a business in a foreign nation, you should at the very least be aware of the risks and costs of running an Estonian company. Overall, anticipating that you’ll have more expenses and shorter revenues than you were anticipating doesn’t mean that you should accept this.
#5: Focus All Your Energy On Marketing And Sales:
Simply put, your small business isn’t going anywhere unless you make some sales. After all, without money coming in from your customers, you won’t have a shot. With this in mind, you need to make sure that you spend almost all your energy and commitment to marketing and sales.
You’ll need to think about the best ways to get leads, to convert them into sales, and to keep them as repeat customers. So, instead of focusing on branding your business, you should start by generating leads. This is one of the best ways that you have to run a successful business.
#6: Discover Ways Of Increasing Your Profits:
In order to run a successful business, you need to understand that you have 5 different aspects that affect your overall profitability. These include your ability to:
– generate leads
– convert these leads into paying customers
– make these customers buy from you more often
– increase your average price
– increase your profit margins.
If you are able to succeed at these 5 areas, you can be sure that you will be running a successful business.
#7: Keep Testing And Measuring Everything You Do:
One of the things that many business owners seem to forget is to keep testing and measuring new strategies, new techniques, new products. Sometimes, a small change can make a lot of difference. However, you need to make sure that you are always on top of the results. This is the only way that you have to discover if something is working better than it was or worse, and adapt at a fast pace.
So we have discussed how to run a successful business. As you can see, there is a lot to think about when you want to run a successful business. As we said earlier, while it is important to have a business plan that states your goals, you also need to be ready to make changes quickly in order to get better results. For more information on marketing check out this article: Measure Twice – Cut Once: How a Carpenter Taught Me Successful Marketing!
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