How to Run Your Own Business Successfully

Take care of the basics and you will achieve business success.

Entrepreneurs are every bit as diverse as the businesses they run. Each has his own particular talents and areas of expertise. Many business owners are passionate about the products or services they offer but regard the day-to-day fundamentals, essential to each and every business, as necessary but uninspiring chores. Others like to stay elbow-deep in every aspect of their business. To run your business successfully, keep your eye on the basics, as well as the bigger picture, and you will avoid many of the pitfalls that cause enterprises to founder. There are countless variables you have no control over that can spell failure or success for your company, and there are variables you can control. Running a business successfully is more than just having a good product, a good location and a smile. For any modern business, success comes down to regularly attending nearly a dozen facets of the enterprise.

Instructions

1. Plan for success. Analyze every area of your business, from service or product development through to after-sales care. Document precisely how you propose to make your money, what it will cost you to produce and deliver the product or service and how much profit you expect to achieve. Produce operational plans and financial forecasts. Put together a formal business plan. This should include a statement of your business objectives, a brief history if you are already trading, a description of your product or service, the names, roles and credentials of your management team, a market analysis and details of your resource and finance needs. Also include sales and profit projections, a cash-flow forecast and a projected balance sheet.

2. Control your finances. Set budgets and monitor performance against plan. Keep tight reins on expenditure and reconcile your bank account on a weekly or even daily basis. Optimize your cash flow. Pay bills on time, but pay early only when doing so obtains you discounts. Chase any late payments from your customer with timely reminder letters and, if necessary, follow-up telephone calls. Implement a procedure for handling delinquent accounts, making sure you conform to prevailing legislation. Bank all income straight away.

3. Monitor sales revenues and margins. If sales or margins fall short of expectations, take remedial action and review your profit forecasts. Regularly reassess your break-even point and determine the impact of falling sales or reduced prices. Beware of chasing business by engaging in price wars, because large volumes of low-margin business can have a devastating effect on your bottom line.

4. Evaluate your market. Keep up to date with changes in your market sector and assess how these impact your business. Watch your competitors and monitor developments in products and technology. Be ready to adapt to market changes.

5. Manage and motivate your employees. If you own a small business, avoid becoming "best buddies" with members of your team. Retain -- and get the best out of -- your staff by providing realistic remuneration packages, appropriate training and development opportunities, and a safe and comfortable environment.

6. Comply with all relevant legislation governing your premises, employees, financial reporting and contracts. Keep up with emerging legislation and regulations, particularly those specific to the product or service you provide.

7. Conduct ongoing risk assessments and identify areas of vulnerability. Consider political, economic, social and environmental factors that may threaten your business success, and take steps to minimize their impact. Examine operational risks -- such as product obsolescence or over-reliance on a single sector, supplier or customer -- and take the required remedial action.

8. Care for your customers. A satisfied customer is an asset to your business, but a dissatisfied client can immeasurably damage your reputation. Implement first-class after-sales care policies to achieve both repeat business and client recommendations.

9. Avoid complacency. Your sales and profits are on target, your workforce is happy and your bank manager loves you -- but things can change. Maintain a marketing effort and remain constantly alert to changing opportunities. Be prepared to push your business forward or move it in another direction should the need or opportunity arise.

10. Delegate when necessary, and know your limitations. As a business owner, you may be tempted to handle too much of the detail. Focus on your strengths, and either delegate or subcontract matters that others could perform. For example, if finance takes too much of your time and energy, recruit or engage an accountant and call for regular progress reports.

Tips & Warnings

• Join local business clubs to share ideas and keep up-to-date with market and other developments.

• If you can afford his salary, a trusted and competent personal assistant is worth his weight in gold.

References

• SBA.gov: Running a Business
• BBC; Why So Many Start-ups Fail; Howard Graham