Small Business Management and Entrepreneurship

Owning a successful business is no longer reserved for a lucky few. It is because there are some rules followed by those successful business people in making the business people to climb the richness ladder with assurance and comfort ability although any business is about risking and that the higher the risk the higher the reward or profit.

When you want to startup a business you first must have an idea, example of business ideas are like opening up a hairdresser, opens a salon, a shop and much. Generally, people do make huge mistake. Just because they are thinking about the job and not the business. Only because you are a good chef does not mean you know how to run a restaurant. More important, it does not mean a restaurant would be successful in your market. So you have to clearly assess and evaluate your business idea before implementing it.

Business wise you have to make sure that what you are going to produce Is it a product or service they have fallen in love with. Again, just because you love something does not mean a profitable business will come of it. This is especially true for first-time entrepreneurs. Learning how to run a business is hard enough; you don’t need to make it any harder by doing something you love rather than something customers love paying you a good profit for or producing what you want instead of what they want.

There are some guidelines on how you are sure that your intriguing idea is also something from which you can truly make a profit? There are three essential considerations one has to bear in mind.

Make sure the product or service has a repeat buy. This is by far the most important aspect of long-term business success. You have to have a product or service that people will keep buying. It is better and more profitable, in my opinion, to have a pool cleaning company than a pool building company. Put another way, a business owner should focus on getting a customer once, but making a profit from that person for a very long time.
Be certain you have a high profit margin.

There are very few companies that can compete long term on a “we are cheaper” marketing platform. In any new business, you need to watch your cash flow–and if you are trying to work with low profit margins and make gains in volume, you will need to have a high level of working capital to keep you running through the lean profits early on. Having a higher margin is extremely important when you are growing a business so you can self-finance your growth.

Build a strong support team because a good idea is not enough. The idea counts most, yet a quality idea must still have a great team of people behind it to give it wings. Time after time, when people bring me a business investment proposal or an idea they want to take to market, I ask them who is on their team and they respond with something crazy like, “Oh, we have not hired anyone yet.” Get a board of advisers. Get a team of professional accountants, coaches, lawyers and bankers. A great team will greatly improve the chances for success of any business.

Now if I were going into business today, to be sure of the market what would I choose? I would start with one premise and some hot industries. Here the premise is, you do not make money panning for gold, and you make money selling pans. Get in the way of a buying frenzy, and you will be a success. Therefore the fastest way to make a restaurant profitable is not by having a great chef and great decor or big buildings it is by attracting a starving crowd with money so that they can eat the food in exchange for their money.

In other words look for an idea you can take national or, even better, global at some stage. Although it might be fun and a challenge to establish yourself locally right now, but eventually you’ll want to build something much bigger for the future and also expand you business.

Money Management Tips For Your Home Business

To help you avoid financial struggles or even the loss of your business, here are a few money management tips. Don’t neglect this crucial area, especially if you don’t have any previous experience managing money. Remember that making money, not losing it, is the main reason why you’re in business.

Money Management System

You probably don’t want to spend hours doing complicated record keeping, but you need to spend a little time setting up and following a system to manage the money coming in and the money flowing out. This would help you avoid future money management mistakes.

Money management ideas and skills are essential to the success of your business, so it should be one of your top priorities. Here are some basic money management tips that will help make this area easier and more effective:

Money Management Strategies

Software – A money management software program is the easiest way to keep track of your home business finances. You can track all of your checks, schedule payments and create a budget (Quicken by Intuit is ideal for a one or two-person business). Determine your business needs and choose the most appropriate software to match them.

Invoices – Word-processing programs like “Microsoft Word” or “Lotus AmiPro” provide you with templates to create your own invoices.

Business Account – Open one at a bank with your registered DBA. Don’t mix your business money with your personal money. To find a good bank, ask for references from other business owners. Depending on the frequency, you should update all your bank transactions once a week or once a month.

Cash Flow – It’s the lifeblood of your work at home business. To maximize your cash flow, you should collect on services or products when you deliver them. The easiest way to collect the money you are owed is by making credit card payments available to your customers. Occasionally, you may need to extend credit however, check out if your client is credit-worthy, and make a habit of following up on overdue payments without delay.

Create a Budget – A budget is a record of your planned income and planned expenses for a fixed period of time. You plan your finances and then track if you’re operating according to your plan. Compare your planned income and expenses with the actual income and expenses each month. Before making each purchase, ask yourself if it will help you improve your business or set you back. Budgeting is one of the areas that will give you more control over your money.

Cash Reserve – Every business has ups and downs, so you need to protect yourself from the “slow” times. A cash reserve will give you a cushion to survive these tough periods. Depending on your budget, you should have a cash reserve equivalent to at least 2 or 3 months of spending.

Money Management Advice

The management of money boils down to exercising discipline. Either you control the money or the money controls you. Good money management will greatly improve your chances of success. You have many helpful resources and articles online for money management tips to help you on this topic. Best of all, they’re FREE!

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