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The most common reason for business failure is lack of money to keep the business alive until it can become self sustaining. But, having said that the main reason, in my opinion, that small business runs out of money is that the business has had poor management. The money was spent on guessing what would work or worse yet trying everything regardless of what it was. Over purchase of inventory, poor employee scheduling, mis-reading the target market or failing to identify the target market.
If you fall into this category of business owner all is not lost. There are some things you can do in the management of your business that will dramatically improve your chances of success.
Plan, plan and plan some moreI feel pretty sure you wouldn't drive cross county without a map and some possible hotel reservations. Yet it's amazing how many people will start a business and try to react to whatever happens each day. Successful businesses always have a plan. A guide for where they want their business to go. Not just for today but five years down the road and they never make a decision that goes against that plan.
You actually need one big plan that contains several smaller plans within it. The big plan is of course your business plan. Usually at least a five year plan. Even if you are a small home based business you need a business plan if you expect to create a viable business. You'll find the outline for a business plan by clicking this link.
Within your business plans will be other plans such as your marketing plan. A good one is outlined in my book, How to Market, Advertise and Promote Your Business Or Service In A Small Town. A marketing plan will help you find your target market, position your business or products, and set sales goals and advertising objectives.
Plan your business budgetI would hope you have some kind of monthly household budget and you should have the same for your business. A good budget will keep you on track as to how your business is doing. You can control your expenses, payables and receivables, payroll (if you have employees besides yourself) and other financial obligations.
Once again, like your business plan, your budget will also be in sections. A monthly budget is a must to monitor your current business condition. You also need a quarterly budget to allow for seasonal business (such as Christmas) or other conditions that may effect your business. Normally you would not want to budget longer than a fiscal quarter.
Get employees or partners on boardDuplicating efforts hurts a business and makes the whole process non-productive. Make sure that you have detailed guidelines that detail who does what. That way each person knows the area of responsibility and can take responsibility for it. If you don't have employees then work descriptions should be created for those times when you may have to call on family members or part time help. Detail the elements of each task and how to do it.
Set time limits and keep themWhen I started to write my book is set some deadlines. I had to be done with certain chapters on certain days. Otherwise I would keep tweaking and tweaking until I'd never have gotten it written. So set goals with specific time limits for accomplishing them. Setting the goal and the time to complete it will guide you towards achieving them.
If you've set a goal to increase business 5% by July 1st -- then detailing how you expect that to happen is the most important part of making it happen.
Keeping priorities straightThere are things that must be done, should be done and will never be done. Successful business owners are able to prioritize what's important to the company right now and what's important down the line. Make a list of the things that you or someone in your organization must attend to each week. I usually make my list on Tuesday. Why Tuesday? Mondays and Fridays are usually too hectic. Tuesday is usually a slower day in most businesses and I also have Monday (when most problems seem to happen) to take into account.And it also allows me to include the following Monday in my next plan. So each Tuesday I make a list of what I want to accomplish over the next seven or eight days.
If you're a business then act like itEven if you are the only person in your business you should still have a company policy. This would detail things like the company code of conduct, level of product quality, the consistency of your customer service, community service and your standards of advertising and promotion.
The last word on how to manage your small town businessThe ideas above are not all you must do to be successful but they will head off a lot of your early problems. The other areas that create problems for new businesses are lack of experience, poor location choice, poor inventory management, extending too much credit, expanding too soon and most important placing the blame on others when your poor management was the principle cause for the business failure.
Planing, priorities and a desire to succeed will take you much further than just going through the motions hoping the business will succeed.
This article may be reproduced for your non-profit group or organization provided it is not altered in any way
and the following is attached:Used With Permission
©2000 Eagle Marketing PO Box 271 Bozeman, MT 59771-0271
http://www.smalltownmarketing.com - (406) 585-0219
email: tommail@smalltownmarketing.com
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