Small business success is based on being sure of what you do, combined with taking advantage of an opportunity that you know is worthwhile. Start by focusing on and clearly listing your goals in a formal plan, which you can use as a type of road map.
Doing this will give a sense of purpose and assist you in being successful while expending a minimum amount of time, energy and money.
You will also want to find a significant consumer need in the area where you plan to do business that is not being me at the time.
Remember that you may develop a product people think is “clever” and “different,” but if they really aren’t very interested in buying it, that won’t really mean very much. To circumvent this problem, try to do some market research before you proceed any further.
Writing a marketing plan for your business
The purpose of doing this is to determine the way in which you hope to attract and maintain customers while earning a profit.
It should state what your target customer base is, how you plan on penetrating the market for your particular industry, and what you anticipate your annual income will be for the next five years.
After you have created a basic business plan, try to estimate what you financing needs are in order to make your business a success.
The marketing analysis you do will result in sales forecasts, and then you can determine how many employees you need, which is an important part of your operating budget.
After that, you can calculate financial projections for your small business and estimate the projected cash flow.
Creating a formal business plan
Using the information you have already gathered, this plan should clearly show that you business will sell enough products or services to make a reasonable profit and interest potential investors as well.
You can use this detailed document to obtain the financing you need for your start-up venture, and it should also become the “operating manual” for your company once you have been properly funded.
Selling your business to others
To raise the capital you need for your venture, you have to convince potential backers that both you and your company are worth investing in.
To accomplish this, use the negotiating tools that will put you in a more favourable position than your competitors and allow you to secure funds on terms that seem reasonable to you, rather than basing them solely on your investors’ demands.
To a great extent, the thoroughness of the cash-flow analysis you conduct at the start will help determine how you can deal with sales variations, inventory problems and diminished customer interest. Since this is so essential, you might even want to consider having a financial advisor assist you in completing your business plan.
Once you have your profit-and-loss statement, operating budget and cash-flow projections lined up, you will know exactly how much cash you can allocate to various small business systems and strategies. This knowledge will act as a buffer, shielding your small business from changes in your industry and unanticipated competition.