New business owners often launch into entrepreneurship with wild abandon, fueled by enthusiasm, adrenalin and sheer will power. They start their businesses full of hope, often bringing in enough business in the early days to have them dreaming of sports cars and early retirement. Then, the problems of running a small business start to set in, and if they aren’t addressed quickly them find themselves in a crisis. Smart entrepreneurs know their businesses intimately and practice prevention rather than a costly cure.
Whether you’re a start-up or a growing business here are eight things you NEED to know about your business to help ensure its success.
- Know how to deal with potential tough times – because everyone has them. Plan ahead by developing strategies in advance which you can put into place if something come at you form out of left field. Challenges such as: you become ill; your main supplier goes out of business or fails to deliver; a major competitor starts up in your market; or you need to make a major capital purchase to stay afloat. Create your own list and plan for every eventuality.
- Know your business plan. Revisit it every few months and update it regularly to reflect what’s happening in your market and industry.
- Know when things aren’t going well in your business. Develop early warning systems – set up evaluative processes such as sales forecasts and cash flow spreadsheets. Don’t be caught off guard; spot problems well in advance, before they become too dangerous to your survival. Remember prevention is always better than cure.
- Know your industry and watch it carefully. Early warning signs of tough times ahead are usually reported in newspapers or trade magazines. Don’t get so caught up running your business that you lose sight of what’s happening around you.
- Know your customers – they reflect the pulse of your business. Carry out regular market research so you know exactly what your customers want today not yesterday. Discover their level of customer satisfaction.
- Know your competition and be aware of what they are doing right, and what they are doing wrong. If you know their strengths and weaknesses you can make their weaknesses your strengths and obtain a major advantage over them.
- Know the cultural trends of the day and how they might affect your business, and how you can take advantage of new opportunities. Understanding the zeitgeist is one of a successful entrepreneur’s major traits.
- Know your financial status at any given moment. Know your bank balance, your accounts receivables and your accounts payables. Do regular sales forecasts and maintain a monthly cash flow so you are always up to date with where you are in reference to your targets and goals. And avoid getting that dreaded call from the bank informing you a cheque has bounced.
The more you know about your business, the more likely you are to succeed. Knowledge is Power.
Trenval Business Development Corporation is Bay of Quinte’s Community Futures Business Specialist, financing business start-ups, expansions or successions in the Quinte region for 35 years. Trenval can help with small business support including small business funding and small business loans.