10 Requirements For Business Success
WARREN Buffett recently seized the opportunity to invest in Goldman Sachs and net a $783 million paper profit. Ryanair chief Michael O’Leary is plotting to buy oil when he thinks the price can’t fall any further and is busy making plans to launch a low fares transatlantic airline.
As a business owner in these uncertain economic times, how you manage your business and having the right mindset – like Buffett and O’Leary – to seize any opportunities and head off the threats you encounter will dictate how well you power through the recession.
Keeping the following 10 key points in mind will help you do that:
TRUE entrepreneurs are dedicated to what they do and passionate about it. They also have a natural curiosity that fuels a desire to keep learning They help to keep that passion in their life through mental and physical activity.
Reading or listening to at least two business books and four business publications each month will help to keep you thinking like an entrepreneur. Staying in shape and doing proper regular exercise will help the creative juices flow through your brain and body.
Having physical and mental agility will help you to regularly brainstorm new ideas and ways to improve on all aspects of your business.
IF business owners can learn anything from the credit crunch at the moment, perhaps it’s the importance of having a clear plan to access capital and credit for your future needs.
Always expect to need more than you plan for. Having a reserve of capital – sometimes called a ‘war chest’ – is critical to building a business. Having a source to tap into when cash flow runs low could make the difference between failure and success.
Bearing this in mind, don’t spend all your money on getting started. Use credit in your business to improve cash flow and create it under the business name to preserve your personal credit history.
RECESSIONS inevitably bring with them an increase in the number of businesses going under.
Particularly because of its advantages for credit, asset protection and personal liability, the best structure for every startup is a limited company.
Have the proper entity and compliance in place, and find out what licenses and forms you are required to file so that you avoid any future problems in this area.
BOOSTING morale during a downturn might not be easy, but ensuring that you have a team of advisors, mentors, suppliers and staff who share your values and vision can help you refocus on the future.
It might help to write down your own values and the vision you have for your company and your life regularly, or as when you go about planning for the business.
Marketing and Business Development
COMPANIES often hastily cut back their marketing and advertising budgets when business slows down.
If a competitor is doing that, then this might present an opportunity for you. But marketing is an area of your business that will need constant attention and new ideas.
Having a trusted brand while developing multiple sources for lead generation and sales will help give you an edge. You can also use this time to stay ahead of the game by developing new products and services.
VALUE is paramount when money is tight, as any Ryanair passenger, or shopper in Aldi or Lidl will tell you.
Your customers also demand value – and from experience we know that your number one question is likely to be: “how can we create more of it for them?”
Being able to do so gives you a competitive edge, and your clients will happily pay for this.
FREEDOM – and free time, in particular – might be at a premium when running your business makes numerous demands on your time.
So always look for ways to leverage your time, money and other resources – make the best use of the support you have from your team, for example, which we have mentioned above – in order to enjoy your life.
Are you going to have a job or be an entrepreneur? Think about being entrepreneurial in running it, as opposed to simply having a job that requires you to work in the business.
The difference between acting in this way – and in not taking the time to leverage your resources in order to keep up with the day-to-day activities – can mean the difference between the failure of a business and its success.
CHALLENGING times demand up-to-the-minute information so you can take the crucial decisions that will get your business through the current economic climate.
If you cannot interpret what a financial statement means for your business, you may find yourself amongst many small business owners who have failed in their first year.
Being able to manage the business and make decisions that will positively impact on it by looking at financial statements is fundamental to future success.
Consider investing in some of the latest financial software that can prove a vital tool in this regard.
Knowing if your company is profitable on a yearly, quarterly, monthly and even a daily basis, knowing where your business is at all times, and knowing where to make changes when necessary is important for its survival.
IT Systems and Procedures
THE financial world, to everyone’s cost, is discovering that chaos can result when necessary rules are not in place. Don’t let your business go the same way.
Create operational systems for the staff to follow, so they’re not making up their own rules as the company grows.
It’s so easy when you first start out to do everything yourself, because you know exactly what you want, when you want it and where it goes.
But when people don’t know the rules, they make up their own. Therefore having a written method to every task in your company will save you frustration, time and money.
HAVE a clear direction and plan for the company. Developing an action plan to achieve it in a specific time frame, and developing business and life plans will determine your direction.
Many people – and the majority of businesses – operate without a plan, and they neglect this vital point every day.
In many cases, business owners also neglect to write out their exit strategy for the business. But do those around you know what to do with the business if you’re not on this earth tomorrow?
Do you know why you’re in business in the first place? Do you want to build a legacy for your family, go public or just run a small shop?
Without having an exit strategy, how will your employees be able to share in your vision?