For Small Business Success
who start a small business have high hopes of big success. Yet
few small businesses survive beyond five years.
Why? Because only successful small business owners have recognized the basic requirements it takes to be a success over the long haul. Make sure you're one of them.
there are just four broad requirements that can almost guarantee
your small business success:
- A few personal traits essential for small business success
- A big enough market that a small business can tap
- Planning and organizing
- Monitoring and controlling
TRAITS ESSENTIAL FOR SUCCESS
People with very different personalities have succeeded
in business. Therefore one cannot say that there is an entrepreneurial
personality. But there are certain traits that are essential
for business success. The traits listed below are practically
A self-starter - This is the essence of entrepreneurship.
Employees have a boss to tell them what to do and how to do
it. Entrepreneurs must decide what to do and learn the how.
Persistence - Unless you are able to persist against
all the frustrations and adversities that are inevitable while
doing a competitive business, you are not likely to see small
Learning through doing - Without observing the results
of your decisions and actions, and learning from your mistakes
and successes, your persistence might actually make the situation
worse. You might be persisting with wrong actions.
The habit of planning and organizing - If you don't
have the habit of working out the details involved in achieving
what you want, and then going out and organizing all that is
needed, you might be floating around aimlessly. Aimless activity
does not lead to small business success.
A MARKET THAT A SMALL BUSINESS CAN TAP
to be a market for what you plan to offer or there
will be no business. Next, existing competition in this market
should be something that you can handle or you will find yourself
driven out of the market.
the market is competitive or otherwise, you simply have to know
your customers. If you don't know such things as their age,
gender, occupation, needs, likes and dislikes, you simply cannot
hope to write sales messages that will appeal to them.
need a clear idea about what your customers expect from your
kind of product or service. These customer expectations will
form the basis on which you develop your sales messages. You
can also gain a competitive advantage if you can meet any expectation
that isn't currently being satisfied properly.
you have to know the places your customers frequent, the materials
that they read, and the programs they attend or listen to. You
communicate your sales messages to the customers at these places,
or through hese materials or programs. Small business marketing means selecting the most appropriate
medium to communicate.
PLANNING AND ORGANIZING FOR SUCCESS
Although a bit of forecasting is involved in planning, plans are primarily
an expression of your vision. You have some ideas about the
business you want to do, the results you want to achieve and
the way you would go about these.
planning involves evaluating these ideas against he prevailing
business realities, including the market, the resources required,
and the resources available to you. The
plan also needs to include an estimate of outside assistance
that you will need. It will explain your background, what you
plan to do, as well as the resources requirements and how you
would arrange these.
key component of your business plan would be the program for
achieving profitability - how you will achieve required volumes,
the prices you will be able to charge, and the costs you will
incur. An essential element of the business plan would be estimating cash
flows. Initially, there would be cash outflows for establishing
start, there would be cash inflows from sales. However, until
the sales reach a certain level, the inflows would be insufficient
to cover all the outflows. There ould also be the problem of
credit - the credit you receive could be less than the credit
you have to extend to customers.
A cash flow
statement showing inflows and outflows month by month, incorporating
all the above factors, would show how much external financing
you would need and when. The same statement would indicate when
you would be able to repay the borrowings.
would achieve nothing. It is organizing that creates the business.
With the clear ideas provided by the plans, you go out into
the world of government, investors, bankers, suppliers of equipment,
merchandise and services, employees and customers. You would
work with them to translate the plans into an operating business.
AND CONTROL OF YOUR BUSINESS
You have the plans telling you how to achieve profits. Now you have
to compare your actual performance against the plans:
- Are costs within allowable limits?
- Are sales growing at planned volumes and realizing estimated prices?
- Are credit sales being collected in time?
- Are unsold stocks accumulating?
- Is there any significant change in market conditions?
there will be variations between planned and actual results.
Your task then becomes identifying the factors that caused the
variance and taking the necessary actions to ensure profitable
if costs increase, you might have to increase your selling prices.
If local demand declines, you would explore new markets. Effective
control is exercised not by bossing people round, but by setting
standards, checking performance against those standards, and
taking appropriate action in time.
Small business success is achieved by:
- Assessing yourself to improve your success traits
- Assessing the market for demand and competition
- Meeting customer expectations and publicizing this fact
- Making detailed plans and implementing these effectively
- Controlling performance through monitoring and timely action.