Almost every second business magazine will offer you tips for running a successful small business. However, the problem is tips alone would take you nowhere in terms of the financial success of a small business. Often you would notice that given the smaller size and resources required, it is rather simple to start a small business, the tougher part is sustaining through a longer duration and turning it successful.
In my previous article (here), I have explained about the real meaning of success in a small business. The things I have explained there, are among the most important success tips that you should never forget, whether you want to start a new small business now, or you’ve already started one.
Most times we see that running a successful small business is a significantly tougher task than it actually appears. Most times the success or the failure of a business module is deeply dependent on understanding the why and how of taking any action and how well prepared are you to deal with the consequences. The fact is that whether you have been running a business for a while or you are a first time entrepreneur, there are some critical factors that need to be understood and monitored quite closely to gain maximum returns and minimize the over scope for potential loopholes.
Often it is seen that planning is crucial to start a small business which is supposed to be successful. Just like the fact that the risk exposure would be relatively lower in a small business, the relative maneuverability is also limited. As a result what happens is you need to make a well designed plan and work in a clear manner to avoid confusion.
Tip #1: Conduct a Deep Market Study
It is very important to choose the right type of idea for running a small business. Do not just concentrate on what you want to sell; it is very important that you also take into perspective what the market dynamics are. Don’t only look at business models that you “think” would be successful. It is crucial that you actually conduct a market research and figure out alternatives that have been proven to profitable and have a strong return track record.
The Power of the Internet
Before the Internet becomes introduced to the public, all the small businesses had almost the same model and plan. They were all brick and mortar businesses that had to be limited to a special location. But things have changed a lot since the Internet has become accessible to everyone. You can start a worldwide small business from the comfort of your home while the things you can do for its success have no limit.
You can start multi-million dollars small business that can be managed only by you, or in case you want to expand it, by a few employees who also work from home and through the Internet. There are so many millionaires who manage their online businesses on their own. They are from different age groups and work from different parts of the world. This was not possible in the past, but it is becoming something very common now.
Indeed, although it is over 20 years that the Internet is introduced to people of the world, we are at the beginning of the era which is called Data Technology. Thanks to the power of the Internet, you can make millions through sharing the data with the people of the world, and the Internet and the data technology systems boost and promote your business automatically. The time that you had to open your store at 9am every day is over. Now you can have a business that makes money for you 24 hours a day 7 days a week. It makes money even when you are asleep.
So, if you are thinking about starting a small business which has a much higher success rate, then the most important tip and hint is hidden in the Internet and its power. Run a business that can be managed and promote online. You will have less expenses and a lot more profits.
Run a worldwide business not a local one. Don’t think small. Have big goals and dreams and start a small business which is as big as the world.
Tip #2: Cashflow Is a Primary Factor in Your Small Business Success
Whenever you consider starting a successful small business, it is extremely important that you pay attention to the cash flow condition. Remember that no business can run successfully if the day to day cash requirements that a business needs is not handled deftly. You must remember that cash flow is the lifeblood of any business and before giving your business any push, you must look at working out this basic requirement first. You can use a wide gamut of alternatives like
- Asking for upfront deposits
- Greater number of credit days
- Flexible loan repayment schedule
According to Warren Buffet, money for a business is like oxygen for the human. It is something that keeps the business alive.
Running a business, even very small, needs a lot of money. When it is a brick and mortar business, you have to rent a place which can’t be lower than $4000 per month even in a place which is not that popular. You have to buy a lot of other things to equip the place and start the business finally. For the first several months, the regular brick and mortar small businesses are nothing but expenses. You have to spend a lot while it is not clear whether it will finally start making any profit or not.
Therefore, if yo don’t have a good backup, forget about running a business because you can end up to a lot of debt.
Running a franchise which is still a small business, has an advantage that the other businesses don’t: There is a higher probability of success because you follow the proven business plan and model of a big company which has been successful for so many year. However, this also needs a lot of money, sometimes millions, to start.
So, money and cash flow is the most important key secret and tip that I can give you here. Run a business if you already have a lot of money and a good backup. If you don’t, or if you don’t want to risk your money and savings, run a small business that doesn’t need a lot of money, yet it has a very high success rate: Following a Proven Business Plan Is the Success Key
Tip #3: Look at the Right Location for Your Small Business
Often running a successful small business is about being at the right place right time catering to the right set of demand. This is exactly why you need to be very careful about choosing the locale for running your small business. Don’t just agree to a location because it is available at a bargain. Undertake a proper market study to ensure that it has the right set of customers, is easily accessible and throws up a strong potential for high profit margins.
The above paragraph was just a tip in case you are serious about running a regular brick and mortar small business. However, I already talked about the small businesses that have no special location and are worldwide. Such businesses not only give you time and money freedom, they also give you location freedom. But the other ordinary brick and mortar businesses imprison you in a special location and time frame. Above all, they are not scalable and they are doomed to have a limited profit and income.
Tip #4: Choose Your Employees Wisely
One of the advantages of a small business is you get to literally handpick your employees one by one. You can easily capitalize on this aspect in a big manner. This is because a small business with a number of employees; every member plays a key role in the overall business output. As a result, it is imperative to be very choosy and selective about the employees you hire for running a small business which will be so successful hopefully. This is a great way to ensure that the quality of employees is never compromised and your staff also shares the passion with which you run the business.
Hiring the employees is very easy when you have on online business. You can easily find the expert you want through the websites that are in charge of introducing the Internet professionals. You just post a job description and explain what you want. Job seekers who find your job suitable and think that they can handle the job will contact you and will give you a quote. You choose the best ones. Everything can be done online and it is possible that you work with someone for several years and you are so happy with him, while you have never met him in person. Chances are what you are looking for, can only be done by someone who is living in a country which is thousands of miles away. You can hire him through the Internet without any problems.
So, here also online businesses are ahead of the others. So far any success tip that I gave you, emphasized on the importance of the Internet and its power in running a small business which is perfect.
Tip #5: Important to Rein in Cost
It is very important to control costs for running a small business if you want to become successful. At no point of time should you get involved in unnecessary expenses and monitor every penny that’s spent. Look at every possible opportunity from
- Using low cost or refurbished office furniture
- Paying vendors upfront to negotiate better rates
- Look at creative options to finance deals in manner that keeps cash flow positive
- Credit is premium and don’t let expenses eat into profitability
So never be shy of putting in extra effort in market study and research in finding out ways to control cash in a more constructive and positive manner. You can often surprise yourself with the alternatives that might come up in the search for a lower expense list.
Compared to the brick and mortar small businesses, online small businesses are a lot cheaper to start and maintain. You can have a very professional website or blog for less than $100 per year while it can potentially make millions of dollars. I know a professional photographer that was used to make less than $200,000 per year. However, since he started selling his photos online, his income has increased dramatically, and last year he made about $16 millions just through selling the same photos while I don’t think he has spent even $1000 for his online business last year. Can you imagine?
Tip #6: Don’t Overestimate Revenues
Estimating revenues and expenses accurately in your business plan is absolutely crucial for success of your small business startup. Remember that it is never wise to underestimate expenses and overestimate revenues. The thumb rule is that expenses tend to always exceed estimates and revenue especially could often disappoint in the initial days at least. You need to account for that and cannot let your business suffer as a result of that.
As I told you above, don’t think about running a brick and mortar small business if you don’t have a good backup and you can’t survive for few months to one or even two years, because your business is not going to make profit at the beginning and you have to spend money to maintain and manage it.
I also explained that running an online business which can potentially make millions of dollars, is very cheap. Having low expenses and high revenue is very important in your business success.
Tip #7: Become Manic about Marketing
Marketing and promotion are the primary factors for any successful business venture today. That’s why it is very important that you learn the marketing tactics effectively for starting a successful small business. From promoting your business concept effectively and taking it out to the desired customer base, you must leave no stone unturned in terms of maintaining the overall profitability of the business at all cost. It is what will help you in scaling up and expanding the business model.
Small businesses sometimes spend lots of money on advertising. They have to, because they have so many competitors, and so, they can’t be seen by the customers if they don’t advertise. Advertising is so important for their success or survival. If they stop advertising, their income stops. Therefore, the small business owners think that advertising is the success key of their business whereas this is wrong. A good business, be it small or large, doesn’t need to be advertised and promoted. Do you know why? Because it promotes itself.
The products and services of your business are the best advertising. Again, here the most important tip for running a successful business is using the power of the Internet and Data Technology systems. If you build your business according to the Data Technology systems, you will not have to spend even one single cent for advertising. I told you above how one of my friends made over $16 million only by using these systems and without spending any money on advertising. All the money he has spent should be the yearly hosting and domain fee which is usually less than $100-150 per year. That’s it. Even to make such a huge amount of money, he didn’t have to have a personal website. A good website or blog helps but it is not necessary.
I told you that the world is changed and people won’t make money through the same ways they were used to, ten years or even 5 years ago. This is just the beginning. Those who want to ignore this fact and want to keep on following the traditional business systems, will have a hard time and chances are they lose their income very soon. You don’t have to resist against the normal progress of business and technology. They are not your enemy. They are your friends and you can make a fortune through them if you just agree to use them properly. And, that was my most important tip in case you are thinking about running a successful small business.
It would be safe to conclude that running a successful small business is a beautiful and seamless marriage of
- Right intent
- Right strategy
- Right planning
- Right concept
- Right resources
- Right technology
Unless and until all these factors come together and form a delightful mix, the profitability of the business might often suffer and the overall business objective could be severely impacted. Just like creating a business plan important, a small business also needs seamless execution of the same and constant monitoring of the same. You must remember that small businesses have rather limited maneuverability and that’s why proper implementation at the first go becomes crucial.
Learn how to business a successful small business by following the Data Technology systems: What Is Data Technology and How It Can Make You a Millionaire?