Cash Is King When you first starting out it’s a little difficult to gauge how much money you will need in the long run to make sure that your business does not fail. However you must do your best at planning every detail so that you were not surprised with unexpected expenses. I know the thing that is beneficial is to give yourself a buffer. Whatever you think it’s going to cost, add 10% to that. Businesses usually take longer and cost more than you think. Whatever you do, do not just guess. Pull up stats, do research in your industry, and interview others who have done similar businesses. The worst thing that you can do is guess how much it’ll cost and find out that you need a lot more. A lack of cash is the number one reason why businesses go out of business before they have the opportunity to start being successful. When putting a business plan together, and figuring out how much cash you need, a good practice is to think that you’re borrowing it from a bank. The bank wants to know three specific things before they give you money. They want to know how much money you need, exactly how are you going to use that money, and how you plan to pay them back. If you can articulate that in a business plan in great detail, then you will off to a good start. Do not skip the part of writing it down. Don’t think just because you have it in your head it will be good enough. You will miss details if it is not written. Once it is written, you may want to give it to someone who knows nothing about your business and review your plan to see if you have written a concise, and clear plan to make sure that you do not run out of cash.Business owners, by nature are optimistic. We assume that we are going to be extremely successful, make lots of sales, and pay the company back so that it has plenty of cash to keep going forward. But what if the business is not as successful as you think it will should be in the very beginning. Then you’re short cash to continue Juan. Or what if you have a very large order and you can’t afford the inventory that you need to for fill the orders that were given. Then what do you do. These are just a few reasons why businesses go out of business. One example shows that the business isn’t as successful as you thought, and the other one is too successful to soon based off of the cash flow and reserves that you have available. Either one can put you out of business. Have a contingency plan for either. Do not go into a business thinking that everything is going to work out exactly as you think. It really does. If you plan for contingencies, that will relieve stress when a curveball is done at you. You will be able to adjust your business and survive the ups and downs of being an entrepreneur.
Know Your Strengths When you first starting a business you start to wear many hats. If you’re opening up a restaurant you are a server, a cook, a hostess, and janitorial when needed. You fill in every spot that is needed for that Company to survive because that is what’s needed. One of the highest expenses in your business will be payroll. The more employees you have, that are not generating direct sales, eat up your cash. With that being said, you cannot do everything forever. It is vital to know what your strengths are. You may be good at sales, but not management. Or you may be good at management, but not leadership. Or in the example of the restaurant, you may be an amazing chef, but have no idea how to actually run a full service restaurant. You want to get to the point that you are operating in your Strank‘s the majority of the time. Whatever that strength is, focus on it and hire others to do The other jobs as soon as possible. Continuing to do things that you were not good at will take up energy, and resources that could be used more efficiently elsewhere.
MAKE YOURSELF STAND OUT Everyone thinks their unique, special, and are adding a service that no one has ever seen before. Every company thinks they’re better than their competition. And in some cases you may be. But the big difference maker is how you let people know.Study your competition and see how they are approaching their customer. Are they using newspaper and television? Are they primarily on the radio, if so, take a different approach. Find out where your customer is and meet them there. If your customer is on social media, as most people are today, then figure out a way to advertise to them that nobody else’s. If you can figure out a way to get your customers attention in a different manner than your competition, this could make all the difference in the world. If you have 50 other companies that do the exact same thing as you, and maybe even better, but very few people know about it, what difference does it make. The way you stand out in the crowd is getting your customers attention. Let them know who you are in a better, and more efficient way then you competition. I have seen many businesses succeed on a shoestring budget just because they figured out the marketing game better than their competition. Remember, we are all competing for peoples attention. You must get peoples attention before you can sell them anything. Without their attention, it doesn’t matter how great your company is, how low your prices are, or how amazing is the service that you provide. You will go broke while patting yourself on the back about how great your company was. So take the time, do the research, and put a valuable marketing plan together