When you decide to start your own business, there are lots of things to consider and research. There are five important rules you should stick to when planning the outline of your business if you want to be successful.
Be customer centric.
Have you ever been to a fancy restaurant where the atmosphere is amazing, the food is luxurious but the service was a huge let down? No matter how great everything was, the fact that customer service was largely lacking, made you not want to go back. Business success depends on an unwavering commitment to excellent customer service. Understanding the wants and needs of your customers creates a greater opportunity to build customer loyalty. Sometimes focusing away from business and profits, and towards what you can do for your customer, can make a world of difference.
Protect cash income and outflow.
An unmanaged cash position can cause a lot of unwelcome surprises in the form of unmet payroll, late fees on payables and unpaid taxes. Any of these surprises can be a hard blow for a new business. Cash flow can sometimes be more important than profitability over the short term. You can take the necessary actions to ensure positive growth by adjusting expenses, accelerating receivables, extending the payables schedule and adjusting inventory levels. If you have to, you can obtain a bridge loan to fill a short-term cash gap.
Proper credit management and availability.
With good credit, a business can obtain favorable payment terms and use its money longer before having to pay it back. Also having good credit can help if there is short term reduction of cash flow. You may be eligible for a bridge loan to get you through that period due to seasonality, inventory enlargement or business growth. Take advantage of payment term discounts which can mean you actually pay less for the goods received from vendors. For example, payment terms may be net 31 days, but discounted by 5% for payments made in 10 days. Avoid COD headaches on deliveries and float any payables to shore up money over the float term.
Make a credible name for your business.
One of the largest disadvantages a new business has to overcome is lack of credibility. Because it is a new, small business, it is not yet well branded or well known as its older competitors. Potential clients might have reservations concerning the sustainability of the business or lack of national branding. With a professional presentation, testimonials, certifications and the help of existing customer word of mouth, you can build a credible reputation. In our high paced, tech world, social marketing can be a huge success.
Manage a balanced lifestyle.
A new business can consume all of an owner’s time and energy. It’s not uncommon for the new venture to consume your life completely. A successful business owner will have to make a habit of balancing all aspects of their life. Separate time for daily business tasks, profit driven tasks and free time to spend with family, friends or doing things you enjoy. Take time each week to plan how you will spend that time. The more you allow your new business to consume your life, the faster you will become burnt out, which will hurt the overall success of your new business.
Learning and installing new habits in your daily business operations can have a dramatic effect on your level of success. Once you have incorporated these five rules into your business habits you can rest assured you will have success in your first year as a new business.