How to Start and Manage a Small Business Successfully

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According to statistics from the U.S. Small Business Administration, over half a million new businesses are started each year; yet only a third of those will last more than 5 years. Those businesses that succeed are managed by entrepreneurs with an eye toward both future trends and past results. It is only by continually assessing the market, your customers, and the direction of your business that you can improve your chance of running a successful business.

Instructions

1. Define your market carefully. There is an old adage in business that if everyone is your customer, then no one is your customer. By narrowing down your target market, you can focus and improve your marketing techniques, which will result in increased sales.

2. Distinguish yourself from the competition. Whether you offer a higher level of service, a better product, or a lower price point, it is important to draw your customer's attention to this distinction. Keep these benefits at the forefront of your marketing efforts so that customers will associate them with your product or services.

3. Create a written business plan when you start your company. This helps to focus your efforts and draws attention to any areas that need more research or development. Review your business plan annually to keep your company on track and ensure you are sticking to your plan.

4. Treat your customers well. There is no business without customers, so your number one priority should be to provide them with services or goods on time and as promised. Reward their loyalty with special deals, rewards cards or loyalty programs.

5. Understand the difference between sales and receipts. Low cash flow is the number one cause of failure for new businesses. Just because you have a signed contract on the books doesn't mean you can count on receiving payment in a timely manner or at all. Plan your finances and payables on a cash basis so you are never caught short.

6. Learn from the past, but keep an eye on the future. Read as much as possible on your industry so you can avoid mistakes that have been made by others. Look for a mentor in your field so you can benefit from an outsider's perspective. Finally, keep abreast of news, trends and events in your industry and in the world to help you predict potential impacts on your business.

Tips & Warnings

• The U.S. Small Business Administration has many free resources available to help new companies succeed. Check the organization's website to find online resources as well as the location of your local branch office.

Resources

• U.S. Small Business Administration