Know your business – Having a business plan is perhaps the most important part of business start-up. Lack of planning is the number one cause of business failure. A business plan is just that; a plan. It’s a blueprint of where you want to be in one, three, or five years, and a list of all expenses to get there, including personal expenses. What licenses, permits, and associated fees will be required? How much inventory to start with? Researching similar businesses, desirable locations, and area statistics are all part of a complete business plan. It should all be there, and following your plan is critical to success.
Know your product – Taking the time to fully understand your products or service will make you look more like an expert. Lean as much as you can and test your product for quality. Selling poor quality merchandise to earn a quick buck will do just that. But the bad reputation you gain from those transactions will detour customers away from doing business with you in the future.
Know your market – Make certain there is a market for your product or service before you dive in and commit. Can the area support your business? Is your area already saturated with similar businesses? With some business, saturation can be good. For instance, an area with an abundance of restaurants may bring more hungry people to that area. They know that if one restaurant is too busy, there may be another next door with ready seating.
Know your location – Location, location, location! If you are not accessible or visible to your potential customers, they will never find you. Choose a location which is suitable to your type of business. Also, make sure your signage is visible from a quarter mile away.
Know your competition – Competition isn’t always a bad thing. Take the time to introduce yourself to business neighbors offering similar products or services. Networking with other business owners can help bring more clientele into your area.
Know your customer – More than 50 percent of businesses will deal face-to-face with their customers. Good customer service is one of the most important qualities with any business. Of reasons customers leave a business, 15 percent of them stated they left because they didn’t like the quality, 15 percent didn’t like the price, and a whopping 70 percent left because they didn’t like the customer service. 96 percent of your customers with problems will never tell you they have a problem, they’ll just take their business elsewhere. Need I say more?
Know your finances – Keep all business receipts in one place and organize them into suitable categories. Use a worksheet to log all daily income and expenses. By looking at these worksheets daily, weekly, or monthly, you will keep better track of how your business is growing or losing and be able to determine your next step of action accordingly. How you keep your personal finances is a good demonstration of how you will financially manage your business. If you never balance your checkbook, find yourself continually in credit card debt, or are regularly late on your bills, it’s unlikely you will manage your company’s financial issues sufficiently. If this is the case, you may need to assign another person to control the financial decisions in your business.
Know loans! Avoid taking risky loans to fund your new venture. Unlike your home loan, where the loan is secured by real value, your business may never have real value unless you purchase the property your business is located at, so banks are reluctant to loan money for business start-up. So why do they? The truth is, they rarely do. Banks typically will require some form of guarantee; that is often your home or other personal property. If your business fails, you stand the chance of losing your property. Keep your business idea in proportion with the amount of money you have available. Only 27 percent of new business owners borrow money to start their business; try to put yourself into the remaining 73 percent.