A business of your own: ingredients for success
Part one of this series was featured on owning your own business is the stuff of dreams. You are in control, you are expressing your personal drive and commitment, you are promoting the service or product that you are convinced everyone will like because of your personal taste, or maybe just because you think its the cats meow.
You have the dynamics to make it work. Your friends and family are absolutely supportive because they know that you will be successful. They have stepped up to loan money to the operation. You are so enthusiastically excited, you have also put most of your life savings into this entrepreneurial dream. The success of it will take you to the stars.
There are four major items that impact owning and operating a business including:
1. Managing your image, and managing your delivery of product or service
2. Managing your employees
3. Managing complacency
4. Aggressively monitoring your cash
Managing your image
Various job recruiters can evaluate an employment candidate in six seconds. It is no different when a new customer walks into your store, or contacts your professional service firm.
It may take a bit longer, but the image perception is cemented very, very quickly. How do you want to be perceived by your customers: welcoming, enthusiastic, focused work-ethic performance, intelligent — an expert in your field, quality-expectation driven, vivacious and fun-filled with quirky products to match. Or are you commodity-based, selling a product that everyone needs but no one really values?
What you convey via your brand will have a lasting effect on your image.
If the customer perception is a negative one, you may never have a second chance to change that perception. Plan very carefully for who and what you want your business to be. If it is going to be high quality high cost, you must deliver that message through everything your business represents, from the person at the front desk, the phone messages, your logo, your website, your physical location. Then, you must absolutely deliver on that perceived expectation — every single time. Remember that you may not only be competing on price but also on value.
Managing your delivery of product or service
Your choice of product or service — what will it be? You must decide early on as to quality versus quantity. It is not enough to have a quality product as it cannot stand alone.
The delivery and service for that product is as important as the product itself. Customers may flock to a business at first for a quality product, but the romance wears off quickly if their interest is not supported. Examples of a failing business are honestly obvious and unfortunately, increase in poor economic times.
The business model and product can be the best in the world, but ignored customers become tired of dealing with poor or complacent attitudes, and indifferent service. Theyll accept a lesser product elsewhere to feel a valued client.
If you opt for quantity, you are in a different ball game. Quantity means price pressure. Be prepared to work twice as hard for half as much. You must be nimble on reaction to price changes. The challenge to match prices on retail products has just ramped up the competition for all like-type retailers.
Can you compete consistently on an immediate, aggressive level no matter the economic environment? This product model requires rigorous and continuous inventory and employee control. Do you have the cash reserves for through put?
This may be your business fold breakpoint if you cannot increase revenue under decreasing profit margin pressure while finding the energy and management personnel to maintain this business model.
Other items on the entrepreneurial checklist that are just as crucial for managing a successful business are:
— Client expectations: Are you meeting them? Do you have any idea? How can you ascertain how clients perceive you, aside from losing business? It is vital that you understand how your brand is perceived and received.
— Employees: retention and training, positive reinforcement and negative sabotage, revolving door attitudes. You can only be as good as your weakest link. Do you know who that is?
— Commitment: your own success and retirement plan means being committed to putting just about everything you have into your new venture. Are you willing to do this at low pay, long hours, high frustration levels, even higher euphoria when your business model works? According to Small Business Trends, more than 55 percent of start up businesses fail in the first three years. Most top chefs regularly work 16-hour days. You cannot slack off. Manage the past, manage the now, anticipate and manage the future.
Next up: Managing employees, attitudes of complacency, and operating cash. How do you know if you are truly earning a decent compensation. Is it all worth it?
Martha Harris Myron CPA PFS CFP (USA) TEP at Patterson Partners Ltd provides integrated cross-border tax, estate, investment advisory and related strategic planning services in Bermuda. She is a member of the American Citizens Abroad Professional Tax Advisory Council. www.americansabroad.org For additional information, email@example.com or call 296 3528 http://www.patterson-partners.com
This article is for general educational purposes only and is not intended as tax, investment, or retirement advice, and cannot be relied upon for any personal financial planning purposes.
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