Small business owners generally experience many highs and lows. Do you have what it takes to succeed? Your answers to the six questions below can help determine your chances for business success.
1. Do I fail well?
1. Do I fail well?
If you take your business seriously and treat it as a business rather than a hobby, you’ll find that all businesses go through tough times. Do you have the persistence to admit something didn’t work and find a way to get where you want to go? Are you willing to step back, talk to people who have gone through what you are going through, and discover a new way out of the tough times?
To be successful in business you must find a way around the road blocks on your path to success. If you treat your business as a hobby when the tough times happen you might be more likely to quit rather than find a way around them.
2. Do I sell well?
All small business owners must sell. You are the most passionate person in your business. And, you must constantly be looking for customers and opportunities to showcase your company. If you don’t have selling skills, take a course, read books, or go through a sales training program. Selling skills are critical for business success.
You’ve made many contacts through the years. Make a list of the people you know and determine whether that person can help you with your business. Could they be customers? Suppliers? People who can help you sell or promote your business? Contact everyone on the list and ask for help. If they say “No,” ask them who might be able to point you in the right direction.
3. Do I have enough money to make it through?
Determine how much money you think that you will need to operate your business and then triple that number! Can you afford to take the risk? Severe cash flow problems can take your focus away from building a profitable business and force you to make decisions you might not have made if cash were plentiful.
Include cost of sales and costs of running your business. How much does it cost to produce your products? Will you need a salary? What employees will you need? Will you be paying rent or running the business out of your home?
And most important, how do you get paid? Is your business COD like most retailers or do you send invoices and wait for payment? If you wait 30, 60, or 90 days for payment, you must have the cash to fund business operations during that waiting period.
4. If I have partners, what do they contribute?
A partnership is a marriage. Ensure that your partners contribute as much financially as you do. This way they have the same stake in the success of the business. Your partners should complement your skills rather than have the same skills that you do. If all of you, for example, love to sell and hate accounting, the business will suffer.
Make sure that you have a good partnership agreement in place before you start working together. An attorney expert in business partnership agreements should prepare or at least review the agreement between the partners. This ensures when the tough times hit you know what will happen.
5. What do I do if my friends think my idea is a good idea?
If your friends tell you that you have a great idea ask them to invest. That will quickly tell you whether they truly think the idea is great.
6. Who are my customers and will they buy?
Your customers write your paycheck. Identify who your customers are and why they will purchase your products and services. What’s in it for them? Why should they buy from you instead of the company they are currently purchasing a similar product from? What additional need and benefit are you providing? Are you charging more than your competition? If so, you must justify your price with the value you provide. Once you have happy customers ask them for testimonials and referrals.
Do a survey of your customers before you change your product mix, services, or other aspects of your business that your customers rely on. Call them. Thank them for their business. Ask if they have five minutes to talk about your products and services. If so, ask the questions you want answers to. Always ask the question, “Why do you buy from our company?” You might be surprised at which of your products and services are really important to your customers.
Successful business owners plan, fail well, always remember that their customers write their paychecks, and rely on people who can help them build strong, profitable businesses. Remember this in tough times. You will get through them!
Published: August 22, 2013