In a sluggish economy, there's no better time to put a plan into action and work for your own profits. But, dreams can be quickly shattered when the first time business owner neglects a few vital steps in the startup process. First off, it's a good idea to take classes in business management.
Here's a basic list of the elements necessary for smooth sailing in your first year as an entrepreneur:
1. Name Recognition.
Too often a business fails because the public cannot connect with the name. The business title is twofold: it should describe the nature of the business and have a catchy name people will associate with your service. If the new business venture is a dry cleaning store, a name that reflects customer service will stick in the mind of a consumer more readily than using your own last name. Example: Speedy Dry Cleaners has name recognition, Harold Hathaway Dry Cleaners does not. Temptation may be great to see your name in lights, but remember that the public doesn't care. They want service and a name that is easy to connect with.
2. A Business Plan.
The importance of a solid business plan is to help you budget your initial capitol and grow your business on an exponential curve. In some cases, you may have to liquidate some assets to keep the business afloat, but with a wise business plan, you will know when it is time to stop and restructure or close the business. By sticking to a sound business plan, you lower the risk of emotional attachment to your new business and enable yourself to walk away if need be.
3. Advertising Budget.
Venture capital may be difficult to attain, and the temptation is to put your last nickel into operations, but your service or product is useless if no one knows who you are. A conservative figure for advertising a start up is at least 10% of your overall budget. Online advertising can be one of the cheapest routes, with your business listed with the Yellow Pages or SuperPages.com. The cost is minimal and a web page is not necessary, but you do need to get the word out that you exist.
4. Gradual Expansion.
Trying to expand too quickly can not only bankrupt you, but also oust employees that you can no longer afford to keep. Service-type businesses are easy to staff with friends and family, and allow you to grow only when your customer base does so. However, be careful not to invest in excess equipment or marketing beyond what you can handle.
5. Customer Service.
Whatever you provide for the community, be sure you are the best at it. A wise entrepreneur stays on top of the competition by going the extra mile for his/her clients. Be aware of specials and promotions from your competitors, and try to beat them at their own game. And once you gain the trust of a customer, hang on like a pit bull to keep her. Your advertising dollars cost you plenty to gain your initial customer base, and to win a disgruntled customer back is nearly impossible.
6. Stay Up To Date.
Keep your business on the cutting edge by maintaining good, modern business practices. You can take online business management classes to ensure that your company is always in line with state and federal laws while remaining flexible and fresh.