Every small business goes through different challenges and over the last 5 years Aaron and I have faced a plethora of our own growing Crucial in to the business that it is today. I’d like to share some tips that I have personally learnt from our fortunes but more importantly our failures.
1. If you fail to plan you plan to fail
This is the most important tip of them all. When a business or idea fails it’s usually because the due diligence during the planning phase hasn’t taken place. A lot of people start a business or release a new product without a plan and more importantly an exit strategy. Take the time to properly research your business idea or if it’s a new product you’re thinking of releasing ask your customers if it is something they are after. Determine how much money you will need and what your short and long term goals are. If things do turn sour revert to your exit strategy because there is nothing worse than trying to back away from something that is losing you money and taking up precious time that could be spent elsewhere.
2. Distribute and manage your risk
Risk is the four letter word that can either make you a lot of money or of course cost you a lot of money. A great example of a company taking too much risk is the now defunct Lehman Brothers. In most cases if you’re looking to grow your business you are going to need to take on more risk than a business that has already matured. Don’t just look at dollar signs and structure your risk like you would your business plan.
3. Cash is (still) King
It’s the age of credit but cash is still king. As a small business to medium sized business try to keep at minimum one but preferably two months cash reserves to cover your operating costs. If you find yourself using lines of credit to get by each month you should take a look at your expenses as you could be bleeding money unnecessarily. Each month make a habit of looking at your budget and find ways where you can save money, If you do this your cash reserves will increase.
4. Find a Mentor, join a business group and ask questions
The best advice you can receive is from other people, if you meet successful people ask them what they did to make it where they are and what their three best tips for success are. Every answer will be different but this knowledge is gold and it will make you a more informed business person. Mentors and business groups are also very important; I personally associate with business groups as often as possible.
Remember you have two ears and one mouth so listen twice as much as you speak.
5. Stay competitive, agile and efficient
You need to regularly conduct a competitive analysis in your market, including products, prices, promotions and your service. Be aware of the outside influences that affect your business such as currency changes, the economy etc. A good way I find to do this is by reading the BRW and watching Sky Business news first thing in the morning. Also don’t get too caught up in processes, while they are important make sure they are flexible so you can adapt and change when needed. And most importantly focus on efficiency, every day ask yourself what you can do differently and how you can improve, this will keep you at the cutting edge and one step ahead of your competition.
What has helped you succeed in business?
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