5 steps to starting a successful business: these time-tested methods will help you put your startup plans into action.Starting a business is tough. But applying sound principles will increase your chances of success. Five key areas you should focus on before you get your startup running include: financing your business; creating an effective marketing plan; managing your cash flow; conducting market research; and being committed to excellence. It is absolutely essential to develop a plan of action before you open your doors and begin your enterprise. Once you've come up with a good plan, the other details will fall in place. It could mean the difference between having a hobby A hobby is a spare-time recreational pursuit. Origin of term A hobby-horse was a wooden or wickerwork toy made to be ridden just like the real hobby. From this came the expression "to ride one's hobby-horse", meaning "to follow a favourite pastime", and in turn, and being a successful entrepreneur entrepreneur (än'trəprənûr`) [Fr.,=one who undertakes], person who assumes the organization, management, and risks of a business enterprise. . If you understand and apply the following five steps, you will already be headed down the path to success. 6 Finance your business Insufficient financing is one of the top reasons businesses fail. Whether your business is just starting or beginning to grow, you should be aware of the different ways to finance your business as well as the pros and cons pros and cons Noun, pl the advantages and disadvantages of a situation [Latin pro for + con(tra) against] of each. A good rule of thumb is to try not to put aft your own money at risk. Also, don't limit yourself to seeking just one source of funding. Consider venture capitalists Venture Capitalist An investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding. Notes: Venture capitalists usually expect higher returns for the additional risks taken. , commercial banks, angel investors An individual who invests his or her own money in a private company, which is typically a startup. An angel investor is not an employee or member of a bank, venture capital firm or other financial institution that normally makes such investments. and friends and family. In any case, having a solid business plan is a must. This includes realistic revenue and market share projections and a clear, understandable business model. 7 Create an effective marketing plan Once you decide to start your business, getting the word out about your company is a priority, regardless of the size of your marketing budget. But promoting your business doesn't have to be expensive. There are cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. ways to attract new customers and make every penny count in the process. Marcia Layton Turner, a start-up Start-up The earliest stage of a new business venture. business expert and author of The Unofficial un·of·fi·cial adj. Of or being a drug that is not listed in the United States Pharmacopeia or the National Formulary. Guide to Starting a Small Business (Wiley; 1999), points out that marketing is critical for startups. Unless you invest in promoting your business, you'll have difficulty attracting customers. "The fact is, some of the most effective marketing tools cost little or nothing to implement," says Turner. The first step toward achieving marketing goals for your startup is to create an effective written plan you can follow to avoid wasting time and money. Whether you decide to send a press release to a local newspaper or announce your business by placing flyers on the windshield of parked cars, an effective marketing campaign requires careful planning in advance. Devote some time each day to develop marketing ideas and tailor your promotion strategy to your targeted audience. 8 Manage you cash flow Cash flow is simply the money going into a business and out again: cash on hand and/or in a business account used to pay company bills, salaries, and other expenses. Companies that are cash flow negative are spending more than their revenues bring in. Improving cash flow involves many techniques, the simplest of which is managing payables/receivables. You want to improve the speed with which your product or service generates cash, while slowing down the rate at which you spend it's critical that you prepare cash flow projections A Cash Flow Projection is an attempt to forecast the cash flows that will be generated by an asset, often a company, over a specified time frame. Methodology Projections can be made with varying levels of detail, but any cash flow projection for a business entails and a cash flow statement. An accurate cash flow projection can alert you to trouble well before it strikes, while a statement is used to analyze the cash inflows and outflows during a specific time period--something most lending intuitions ask for You should also consider hiring a financial adviser. Referrals cart be obtained through the National Association of Personal Financial Advisors National Association of Personal Financial Advisors (or NAPFA) is an American organization created in 1983 to aid the field of Fee-Only financial planning by encouraging interest and establishing a new level of professional standards and reputation for excellence. (www.napfa.org) and the American institute of CPAs (www.aicpa.org). 9 Conduct market research There are a number of ways to conduct research on an industry or a particular market before starting your business. Research can be as simple as asking family or friends about a specific business idea or it may require hiring a professional research firm to perform comprehensive market research and analysis. To get a clear picture of what's happening in your industry and where the opportunities are, consider getting the information you need by conducting research on the Web, joining trade associations, attending conferences, and subscribing to trade journals. The Internet can provide you with countless information sources about any industry. What you can't find online will probably be available in a local library. 10 Be committed to excellence Your business is more than just the production of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. . Recognize that you need to be committed to the whole experience of conducting business to make people's lives better, fixing problems, and providing solutions. Mediocre me·di·o·cre adj. Moderate to inferior in quality; ordinary. See Synonyms at average. [French médiocre, from Latin mediocris : medius, middle; see medhyo- and unsuccessful companies start out only to make money. But the most successful businesses strive to be greater than their competitors by delivering superior customer service and experience. Before you decide what type of products or services you want to provide, find out more about your customers. Create a strategy to consistently exceed customer expectations and you will have customers for life. The commitment must be ingrained in·grained adj. 1. Firmly established; deep-seated: ingrained prejudice; the ingrained habits of a lifetime. 2. in your company's culture and integrated in your overall business strategy. |
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