Success or Failure - you Choose

By: Bob Pearce

I.Success is knowing your Market

There must be sufficient demand within the market to sustain the providers at a profitable level. Customers must be prepared to pay the price required so that you can make a reasonable profit. Market research might appear time consuming but the effort is worth it. Don't get so immersed in day to day problems that you are prevented from recognizing that changes are taking place in the marketplace. Always be aware what your competitors are doing and what your customers want. Don't think that everyone will know what you are doing and what you can offer, it is necessary at times to spend a little money and tell them, particularly when it comes to new products or development of existing products. Ensure that your brand is strong.

II.Success is knowing your Customers

Your customers are why your business exists. You must be very close to them and be aware of, and responsive to their needs. Don't depend on a small number of customers to sustain you indefinitely, because if you lose one that is a significant part of your business. Conversely, do not grow so quickly that you try too hard to satisfy new customers and disappoint existing ones.

III.Success is having the right attitude and habits

The real boss of your business is your customer. They respect good service and competence. Business owners need to be great role models, and practice what they preach. You must lead from the front. You must have a positive attitude towards your business, your staff and life in general. You must be committed to the effort required to be successful. You must be persistent in achieving your goals. You must be patient with your staff and your customers. You must develop habits that have positive consequences for you, that are working. The fact is that if you keep repeating a behaviour it will have predictable, repeating results. Consistency is desirable; inconsistency is seen as indecisive and confused. By systematically evaluating your work habits and replacing the negative ones with positive ones, one at a time, you can dramatically alter aspects of your business positively.

IV.Success is controlling the purse strings

No matter what type of business, some type of accounting software package which can easily capture daily transactions and be operated in real time by in-house personnel is needed. In today's fast paced business world to rely on an external accountant to provide periodic statements which might be weeks or months behind is not acceptable. You should be aware of the mix of debt and equity, and maintain a strong cash flow position with access to contingency funds. This means a forecast (spreadsheet) that projects accounts receivable and other cash inflows against accounts payable and other outflows to anticipate shortages and take action before a crisis occurs, or to utilize excess cash if that situation exists. Don't spend on the wrong things; keep some cash back to fund future growth.

V.Success is having good administrative systems

These systems may be financial or non financial, and may be automated or manual. The objective of these systems should be to support you and make all the business's activities efficient, and relieve you of many day to day routine activities and give you time to work on your business, not in it! Some examples of necessary systems are:- Cash Management, Budget, Variance reports, Key indicators, Labour costs, Job or Product pricing, Weekly sales, Purchases, Other expenditure etc. Most of these don't take much time to produce but are essential in keeping track of your business health. Don't try to learn and do everything yourself, there are times when it will be necessary to employ some external advice on issues such as tax, law, finance and other subjects.

VISuccess is having a good organization structure

As a business grows it must be able to cope with the increased requirements across the board. Don't underestimate the impact growth can have on administrative systems as well as staff. The basic building blocks of an organization structure are:-
(a)An organization chart showing key functions, and the relationship between those functions
(b)Duties and responsibilities of those functions, task lists for all staff
(c)Information relating to business policies, procedures, boundaries of acceptable behaviour, health and safety, machinery operating instructions, incentive schemes or reward systems etc.
If these things are in place and working correctly the organization will have a purpose, everyone will know what is expected of them, and the business can accept growth.

VIISuccess is having a plan for the future

Successful businesses operate within a planned framework, which is called a Strategic Business Plan. This plan should cover a period of at least two years beyond the current Budget year. It should include a Vision for the future look of the business, and a Mission on how that will be achieved. It will be a balanced look at all aspects of the business, not only financial. It will include the current state of the business, its strengths and weaknesses, and any external threats or opportunities. It will describe in detail the strategies for achieving the Vision, and how the progress towards that will be measured.

Success
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