Have you ever thought about starting a new business? If you’ve been reading my blog for more than a week, you probably already know my opinion about starting a business of your own. By all means, go out and do it!! There are some people that depend solely on their job to provide an income for their family. That is incredibly risky!
Would you ever invest all of your money into one single stock? Of course not! You spread your money around in the market to reduce your risk of loss. The same should be true with your income. The more sources of income you have, the more stable you are in terms of monthly cash flow; and if you lose one source of income, you still have others that will support your current lifestyle.
How to Succeed With Your New Business
There are a few keys to success when you start a new business. Of course, there are a few exceptions to these rules, but as a whole, if you stick to these guidelines and have a product or service that is in demand, you will do just fine.
1) Start With a Low-Cost Business
With all of the competition in the business world today, it’s not always the brightest move to go out and spend $500,000 on a storefront business that may or may not survive its first two years of business. No matter how brilliant you think your idea might be, you must remember that 80% of new businesses fail in the first 5 years.
If you think you have an idea that’s worth pursuing, by all means, go after it! Just make sure that you’re smart about it. Let’s say that there’s a market for dog sweaters in your area. Instead of opening up an expensive business downtown to get started, spend a few bucks to create a website (only $1.99/mo.) and spread the word locally through Craigslist or through your local newspaper. If there is enough interest after a few months, then maybe you could look at renting a storefront to see how that pans out.
At times, you may think that you’re moving too slow, but it’s best to ease into big decisions rather than jump in without a clue. Keep your business low-cost and you wont regret it.
2) Creative Marketing
If you’ve ever worked for a large corporation, you know that there are often a ton of dollars poured into the marketing department at the launch of any new product. Is this really necessary though? To make a single product known, you don’t need to spend $20 million to get the word out. You just have to have a great product and get creative with your advertising.
What if you could market something for free and only pay for the advertising once the product has already been sold? Is there anything out there like this? You better believe it. Ever heard of direct marketing? If you find a small group of people that believe in your product (or service), they will gladly tell their friends about it, especially if they get paid when they make a sale. It’s a great way to get your business started.
Other forms could be to mention your website all over the web. Visit forums, related sites, and put some ads up by trading space with someone (they put an ad on your site, you put one on theirs). There are a ton of ways to spread the word without spending big bucks.
3) Don’t Be Afraid to Hire Some Help
If your business starts to pick up, don’t be afraid to hire some help. Part time work is not all that expensive. Plus, you’re the boss, so you can choose how much or how little they work. By hiring help, you can free up your time from doing the mundane tasks and you can focus on the future growth of the business. Without lifting your head once in a while and observing your business from the outside, you could very well be driving it into the ground without even realizing it.
4) Track Your Cash Flow
Do you want to know the number one reason that businesses fail? Lack of cash flow. They might have a ton of orders and shipments, but if you aren’t getting your money until 30, 45, or 60 days later, it’s going to be pretty tough to keep your business running from day to day. Some businesses choose to stay liquid with invoice factoring. With this method, you’d only receive about 90% of your sale price (the intermediary company gets the other 10%), but you get paid immediately! If you are struggling with your cash flow, this could be a great option for you.
5) Plan, Do, Check, Adjust
The world’s market is constantly changing, and businesses need to adapt every single day in order to keep their demand and gain new sales. You must first make a plan, take action on that plan, then check your results, and make adjustments. Repeat this process over and over again for the entire duration of your business.
Are you thinking of starting a business? Will you take the smart approach?