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The Top Ten Things You Must Know Before Starting A New BusinessBy Tom Egelhoff
I know many woodworkers who can make me the most beautiful chairs and tables I've ever seen but don't know the first thing about accounting or marketing or even how to find their target market. So here are my top ten tips for things you must do before you even remotely consider opening the doors to any business.
You must have a good idea. And just because you think it's a good idea doesn't mean it is. A good idea is one that many many people also think is a good idea. I've always thought a Rent-A-Cat store was a good idea. You know for those times when you need a cat for just a few days.. not permanently. But some of my friends disagree. They think it's a really dumb idea. So I'm going to research it a little further. Good ideas often turn into good businesses. Just be sure there are enough people who want your good idea and are willing to pay for it. The best idea for a business? Author Joe Carbo had the eloquently simple answer: "Find a need and fill it." Tip # Two: Create a first class business plan. This is your true road map to success. A good business plan will force you to think about aspects of a business that you probably wouldn't consider. Sales Forecasting, cash flow, operating capital, return on investment, inventory control, advertising expenses, rent, utilities, taxes are just a few things a business plan will cover. How do you create a business plan? Well, your public library will have several books on the subject. You should also contact your local SCORE (Service Corps Of Retired Executives) chapter. You'll find them at your local Chamber of Commerce. If your town is too small to have one check out the nearest large city or town. Also visit your local Small Business Development Center for help with your business plan. Also see: Business Plan For A Start-Up Business Tip # Three: Is there truly a market for your product or service? Do large companies just send out a product without making sure you're going to like it? Of course not. First they do market research on the most likely people who will want the product and see if they respond favorably to it. How do you do market research in a small town? See: How To Do Market Research In A Small Town
Money. Your own or someone elses. If you use your own, guess what? You don't have to pay it back unless you want to. But most of us don't have the money necessary to start our own business. So where can you find money. Well to start with go back and contact your local Small Business Administration office. They have a wide variety of plans for borrowing anywhere from $500.00 or so to several million. They can also advise you on what grants are available and how you can qualify for them. And best of all they are a service you have already paid for with your tax dollars so why not take advantage of that. Tip #5: Location, location, location. For years that was the battle cry of a successful location. I don't think it is a true today as it once was. Today a business is as close as a mouse click or an 800 number. With credit cards and the internet we can shop and buy virtually anywhere (no pun intended). But before I dismiss location completely out of hand, let me say this. A business that relies on walk-in traffic should be located where people are going to walk past it. A business that works by appointment such as a mechanic or some other service business can be located anywhere. So access your business type and get your local traffic studies from the city planning department and see what the traffic past your location is and if it's acceptable to your needs. Also, are you on the going to work side of the street or the going home side. It may make a tremendous difference. Tip #6: Electronics. Computerize or not computerize. Web site? email ordering? I think even the smallest business can benefit from the computer. Inventory control. Maintaining a customer mailing list. Sales projections can all be done and show you how your business is really doing and not how you think it's doing. I guarantee your bookkeeping will be much easier on the computer than doing it by hand. Tip #7: Build a strong customer base. Successful businesses rise and fall on repeat business. And repeat business is generated by satisfied customers. See: Customer Service: How To Get First Time Customers To Come Back
Make sure you're ready to open. I hate to fly but I get to do it a lot. One of the things that comforts me about flying is that the pilot and co-pilot go over a checklist before take off. It's the same list they go over a thousand times but they must complete it before each flight. So shouldn't you also have a check list before your business takes off? What are you going to do that first day you're open? Who will be working? Do you have all the necessary supplies? Forms? Order sheets? Make a list of what you need to do a normal days business. Everything from what time the doors open to what time they close and everything in between. Tip #9 Fire, flood, robbery, economic downturns. We insure our lives and homes doesn't it just make good sense to plan for the worst and expect the best. I'm the most optimistic person I know but there are going to be times when something bad will happen and I know I need to be ready to weather that storm when it comes. Create a plan to start putting a little something aside each month to get you through those tough months.
Knowledge is power. Read about your industry as much as you can. I try to set aside at least 20 minutes of quiet time to read each day. If you do that I guarantee that in one year you'll know more about your industry than 75% of the people in it. How will you know you're reading enough? You'll start finding it more and more of a challenge to find things you don't already know. Tip # 11 Whoa! Tip 11? I thought this was The Top "Ten" Things You Must Know Before Starting A New Business? Well, tip 11 is always give people a little more than they expect. That doesn't mean you give them the store but give them your best effort that you consistently can. That's all any customer can ask of any business. Do your best all the time. The last word on the top ten Seems like there always has to be a last word doesn't there? Going into business is exciting, scary, and stressful all rolled into one. But it's also very serious because it's how you feed your family. That is the one thing I would suggest you keep in the front of your mind. A business can take a tremendous toll on your family life if you let it. Make sure you schedule family time as well as work time and everybody will be successful.
This article may be reproduced for your non-profit group or
organization provided it is not altered in any way Used With Permission Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 888-550-6100 or PO Box 271 Bozeman, MT 59771-0271
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