A recipe for starting a healthy business
Starting a new business is an exciting time. With so much information available today, how do you want to know what you are going to work for them? Everyone should know that having a plan is the key to business success. Developing a plan is a part that frightens, confuses and escapes many new business owners. We recommend that business owners treat their plan as a prescription; think about every step forward as a dose of medicine designed to give you a healthy business.
Before you start a business, you need to make a number of key decisions that you need to answer;
- Who are my customers?
Where are my customers?
3. how to attract my customers?
4. how will I deliver my product/service to my customers?
5. how will I manage my finances?
6. can I afford it?
Within each of these questions, they are the building blocks of a healthy business. For many of them, these questions don’t seem all right, or they don’t all contain what you need to start and maintain a healthy business. We could not disagree, because these questions are a recipe for a healthy business.
Who and where are my customers?
No business can succeed without customers. Ignorance of customers is one of the biggest mistakes made by small companies. Consumers are becoming more educated and have more opportunities to buy today than ever before. In addition, the consumer has become more conscientious in terms of cost and benefits from a more thoughtful buying strategy today than ever before. Knowing what your product or service does for your customers is an easy part, understanding that the customer and how to attract them to a product or service is a more difficult part.
In most cases, new business owners come from companies where they have taken care of customers by using a particular product or service that will provide them with a source of revenue for their new business. Profiling who these customers are will help the company owner to gain the insight necessary to know who the customers are. It is important to understand your company’s position in the competition. Make sure you are not bound by a non-compete obligation or any other non-disclosure or confidentiality agreement before proceeding with customer profiling.
If you are moving into a new area or are under any confidentiality or non-competition clause, sign up for a data mining service that will help you understand who your customers are. Services such as Sales Genie, Hudson or Dun & Bradstreet offer cost-effective mining tools that can share customer information so that you know everything you need to meet your potential new customers.
How do I attract my customers?
Once you know who your customers are and where they do business and what they may need from your product or service, you can develop a plan to attract them to your business. Understanding what customers pay attention to when making purchasing decisions can be difficult for some and seemingly easy for others. Many items or services that are goods can be chosen because of price or ease of delivery. Other things can be chosen by necessity, region or rarity. Finally, there is a purchasing relationship where you have an established relationship with someone in the customer’s company that can influence the purchasing decision; each of these different purchasing parameters must be understandable for a given area of competence or product line.
Goods will be the hardest area for a new business to get to if you don’t have the benefits of location or relationship. Competition is more difficult because more companies compete for the same customer base. There are ways to differentiate yourself from others through a better company image, better customer service or delivery model that can better define your business than others. Maintaining your image can be as simple as a professional, clean look, easy to understand ordering tips and quick answers to questions, concerns or problems.
Using regional advantages or availability to get rare or difficult to find items should be included in your image or presentation so that companies intuitively know that you are different from your competitors. Using a professional branding company to help you define your image and understand how to reach them in different ways will be an investment that will have a good return on investment if you have a good understanding of your message and customers.
Social media such as Facebook, Twitter and LinkedIn can be good ways for some companies, but all of them are still new in the marketing game and their impact on purchasing decisions is still difficult to measure. However, all offer free accounts and should be implemented to support your brand and give your business one additional point of access to markets.
How will I deliver my product/service to my customers?
Providing products or services is a very important aspect of your business. Delivery of products or services is synergistic with Customer Service but is completely separate. Failures in product delivery can meet or exceed customer expectations and are still inefficient and costly and hinder business growth.
Understanding how the market expects your company’s product or service to be delivered is just the first part. Products and services may depend on the supply chain. Supplier and contractor orders that help develop or supply end products or services must be understandable and always in place; A failure in the supply chain is a failure of your business.
Make sure you keep suppliers and contractors to the same standards you expect from your employees, and even better, to the standards you want to be maintained by your customers. Create a supplier performance policy and procedures that are punctual and simple. Use complex contracts and conditions for suppliers only if the industry requires special legal treatment or if you have your own or special contractual obligations. The use of complex legal documents when simple business processes are sufficient can lead to inefficiencies, poor relationships and difficult problem solutions.
Develop a customer feedback program that is simple and easy to communicate and track to customers. Make customer reviews part of regular employee meetings so that your employees understand what the customer says about you, your products and your employees. Use criticism as a development tool rather than a disciplinary tool and look forward to the future as you improve your business and deliver your products and services.
How will I manage my finances?
Financial management is not something you simply know. Getting help from a professional to set up your business will create a solid legal basis for building your business. To be the sole owner, limited liability company or corporation are important decisions that set the financial future on a sound footing.
There are many companies that can help you decide which legal formation is right for you; LegalZoom is one company that specializes in helping people understand and choose the right organizational structure.
Choosing an accountant is another important choice. Understanding tax requirements and having guidance is crucial for long-term financial success. Punishment for ignorance in tax law is costly because most government entities have rigid penalties for criminal filings and late payment of sales taxes, franchise taxes, payroll taxes, and others.
Having a structured system to track your money is also very important. There are many choices for financial tracking systems. Retail environments can get with a simple cash drawer and bookkeeping, or require a fiscal cash register or point of sale system. Other companies may need to track inventory, customer and vendor books along with receivables, liabilities, and payroll. All these financial issues can be tracked using simple books of account or fully functional accounting systems such as QuickBooks, Peachtree or something even more complex. There are sites like FindAccountingSoftware.com that can help you understand your choices and how they apply to a particular company.