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Monthly Archives: June 2017

Tips to Improve Your Business Income

You see, the majority of people go into business to escape working for a boss, or the long commute to work or the 9 to 5 boredom. They want freedom, flexibility and a better income.

So, they take the incredibly gutsy move and go it on their own. They step right out of their comfort zone and they become the boss!

They are enthusiastic, because everything is new and exciting. Their mindset is in exactly the right place, and they attract the orders with their enthusiastic personalities. This could be as simple as attending a networking function, or dealing with the local printer, who knows someone that requires their services or product.

They are dedicated and everything gets done just right. The orders flow in, the business owners are happy, the suppliers are happy, now it’s time to fulfill the orders.

So the mindset changes from “let’s go and get some orders” to “let’s get these orders filled.” The conversation changes at the networking functions and the local printer, to “Wow we’ve got all these orders to fill” and they inadvertently stop attracting any potential orders, with what they are saying.

Eventually they get all the orders filled and realize they need new orders. So they change their mindset and off they go again. The problem is though, that every time they go back to the “let’s get some orders” mindset they get less and less enthusiastic.

Why? Why do they get less enthusiastic? Because when they are fulfilling the orders they are in their comfort zone. That’s what they know best and humans will always gravitate towards the comfort zone.

When they are marketing or selling, it is outside of their comfort zone. It becomes a lower priority and a task that is only completed when they have their back up against the wall.

When they first started the business their back was firmly up against the wall. There was no comfort zone. It was a case of “Get out there and get those orders” or we don’t eat, basically. But, when the orders are flowing the comfort zone is the fulfilling of the orders, so the selling gets neglected.

Small businesses have an extremely high attrition rate, especially in the first 12 months of operation. Going from being comfortable one week with lots of orders, to the next, where you have to go and make new sales becomes too hard.

Sales will have huge peaks and troughs when plotted on a chart over 12 months. Emotions will be just as wild trying to deal with this, but there is a very simple solution.

No matter how insanely busy you may become, always set aside one focused hour a week for new customer attraction. Block out that hour, on the same day every week, for the next 12 months.

Treat that one hour like a prized possession, because this will be the secret to leveling out those sales and emotional peaks and troughs. This will be the secret to the longevity and success of your business.

In this hour find a place that you will not be disturbed or distracted by absolutely anything and focus intensely on attracting new customers, that’s all!

This may be by producing a new ad, hiring a copywriter to produce a direct mail piece, calling 10 potential customers, writing an article for the newspaper or engaging a joint venture partner or anything else. Make it your goal to attract at least 5 new customers every week with whatever you do. Over 12 months you should have attracted at least 250 new customers which will compound because they will tell their friends.

Your total focus in that one hour should be generating new relationships and attracting customers that have never dealt with you before.

Now you are probably thinking, if I’m so busy fulfilling orders how am I going to deal with the extra orders? Well, that’s where your growth comes in, that’s when you hire people, sub-contract the work out or find creative ways to get the orders filled.

It puts you in a very powerful position because you get to call the shots. You decide which customers to deal with and which ones to send to your competitors. You can negotiate better discounts with your suppliers and generate more profit.

You gather momentum and it will be very hard to slow that momentum down.

It’s easier not to set aside the hour, especially when you have orders coming out your ears. But if you want to survive and be successful it is critical that you have a system in place to constantly attract new customers.

And the thing is… new customer attraction can be accomplished in as little as one focused hour per week. One hour per week is the difference between having a business that plods along and having a business with highly profitable orders that just keep coming in, month after month. A business where you get to decide which customers you want to deal with, a business that charges a premium price and a business with a far greater value.

Protecting Your Small Business

In business, with all the excitement of making money, it’s too easy to let it take over your life. This is really not a good thing nor is it a healthy thing. Even multi-millionaires take time out for themselves to do things not connected to their business. Don’t get me wrong, while business can be both enjoyable and a nightmare at the same time, there are other things out there in the big wide world – outside of your small business.

Do not neglect your sports and social activities or it will impact you in the long run and your small business will suffer. It is the peculiar nature of small business to make you obsessed with it if you are not careful. You need balance. These non-business activities will help you.

Also, you should not neglect your partner and family either. I am guessing but I am pretty sure that the divorce rates for small business owners are probably about eighty percent. Of those married couples that I personally know that have set up a small business in their 30s, most divorced within just eighteen months of the start of the business.

There are lots of reasons why this happens, but in a lot of the cases, the partner who has gone into business neglects their family and money gets tight. To be fair, the business owner is not really to blame. It is too easy to become obsessed with the business and forget about any life outside of the business.

If you have a partner or family, make sure you do at least one thing every week as a family unit. Whether it is having a family night at home such as a video night or games night, or even just going to the park to play once a week, make sure that you do it. Furthermore, you must be willing to set aside at least one night every week for just you and your partner to be together. Your relationship will suffer badly if you don’t.

One thing I tell people is that it’s ok if you want to go into business. But you must accept two things.

First off, you must accept the possible risk of having to begin all over again with absolutely nothing if your business fails. That means you may only have the shirt on your back and nothing else.

And secondly, you should definitely get the backing of your partner and family. If you cannot accept these two things I have mentioned, then please do not enter the business world. Too many people who ignore this advice end up becoming miserable. They usually end up being self-destructive, in ways such as taking up drinking, drugs or trying to commit suicide.

Do not forget that 70% of all small businesses go bust within a year. Would a gambler back something that only had a 30% chance of winning? I know it’s a sobering thought. But the fact is that many still go into small business despite this.

This is what it comes down. Small business can be the greatest adventure of your life. But it can be also the most difficult time of your life. You need to take your time and carefully plan exactly what you want to achieve.

 

Managing Small Business

Small business management pertains to the independent ownership, supervision and control of assets, resources, products, services, workforce and profits of an enterprise which is not prevalent in its area of operation.

In an economic atmosphere that breeds and sustains entrepreneurship, a lot of individuals are attracted to the prospect of possessing and directing his own business. They choose having a small enterprise to be close to costumers-enabling fast, flexible, and personalized service, to innovate less expensively, and to manage solely.

Managing both small and large businesses involves the five major functions of management-planning, organizing, directing, controlling, and coordinating.

The mistake that most small business owner-managers commit is giving less attention to planning and controlling functions. These two, when fulfilled effectively would result to excellent goal setting. And the success of every business relies heavily on its long-range goals.

The most popular approach applied to most small businesses is management by objectives or MBO. The reason for this is that it is result-oriented and jobs are perceived in terms of achievements rather than simply functions.

The first step in developing an effective MBO program is to define your business. A transparent and attainable vision of the business is critical for planning, marketing, product development, building and equipment, and financial and staff needs.

The next step is to set both short- and long-range business goals. Long-range goals would serve as the mold from which your company’s MBO program would take form. These goals would triumphantly be attained through management and employee communication. The staff should also take part in the formulation of goals, to increase their sense of commitment in fulfilling them.

The third step in developing the MBO is devising a work plan. The work plan should address the following areasĀ :

(1) goal-should be specific and concise;

(2) measurement-benchmarks to be used; major problems to be anticipated;

(3) work steps-most essential steps to be completed at a fixed time; and

(4) supervisor’s goals-employees should identify which of their manager’s goals relate to their own.

The fourth step would be to report progress. An MBO program must include a provision for regular progress reports. Goals and objectives can only be attained through conducting regular record and review of progress. Progress which is below expectation can enable problem identification.

The fifth and final step would be to evaluate performance. This is done by compiling and reviewing the past results of the steps done in the development of the MBO. Measure every element and know if each coordinated and supported each other.

Small businesses face an array of problems most commonly, bankruptcy and under- capitalization This is often a result of poor planning rather than economic conditions – it is a common rule of thumb that the entrepreneur should have access to a sum of money at least equal to the projected revenue for the first year of business in addition to his anticipated expenses.

Getting into small businesses is not as easy as it seems. To avoid the problems stated above, the owner-manager should first ensure that he has or would be able to raise enough funds. And no matter how small his enterprise is, he should not fail to apply the major functions of management.