A great post from Brad Sugars who writes for Entreprenuer.com
Here are a summary of his ten tips for start-up companies.
1. Offer what people want to buy, not just what you want to sell. Too often, people jump into a business built around a product or service they think will be successful, rather than one that is already proven to have a market.
What does he mean? Better to have a small slice of a large category than a large slice of no market at all. Supply and Demand rules
2.Get cash flowing ASAP. Cash flow is the lifeblood of business, and is absolutely essential to feed bottom-line profits. So you need to find ways to jump-start cash flow immediately.
How do you do that? In a professional services business, you can ask for deposits on work up-front, with balances due on delivery.
You can do the same in retail, especially on high-ticket or specialty item and position it as an added value and a way to insure delivery by a specific date.
You can also add value to generic items by creating private labels, and develop continuity programs where customers pay an up-front monthly fee to insure delivery or availability of items they will buy on a repeat basis. Of course, the key is to make sure there is little or no gap between when you pay for labor, stock inventory and when you actually get paid. Ideally, you’ll find ways to get money up front, and your cash gap will never be an issue.
3.Always find new ways to keep costs low. All the cash flow in the world is worthless if it’s not positive cash flow, which means you have to bring in more cash than you pay out.
To do this, you need to keep your costs and expenses low. We’ve touched on this before, especially in terms of outfitting a startup. The main idea is to never pay retail, and look for used or gently used items to furnish your office or your retail space.
Paying vendors up front also gives you leverage for negotiating better prices.
So do some extra work and research now to discover how owners and vendors are finding ways to work out deals, and you just may hit on whole new ways of doing business.
4.When planning, always overestimate expenses and underestimate revenues. I was trained as an accountant, so the numbers side of business is part of my entrepreneurial DNA, and was also a big part of my early business education.
That said, I’ve never seen a startup business where expenses were at least 30 percent more than initially planned or anticipated, and revenues are at least that much less.
5.Focus on sales and marketing manically. In business, nothing happens until a sale is made. From the jump, you’ll need to find a good way to get leads, convert leads into sales, and make sure you keep getting repeat sales from your customers.
The way to do this is to find or create a marketing and sales funnel system that you can work, test, measure; one that anyone in your company can utilize.
Too many entrepreneurs focus on getting their brand right before they start to generate leads. That is exactly the wrong way to go about business. Leads are always more important than your brand, so don’t waste money getting your brand right at the expense of spending that same money to buy new customers.
6.Find ways to exponentially increase profits. In business, there are five drivers that impact profits. If you can master them while keeping your costs in check, you will run a successful business.
It’s as simple as getting more leads, converting more leads into customers, increasing the number of times those customers buy from you, increasing the average price point of your sales and increasing your profit margins.
7.Test and measure everything. You can’t change what you don’t measure, and you can’t tell if a program or strategy is working if you are not faithfully testing, measuring and tracking your results.
Another way to look at this is to think in terms of doctors. Most like to get baseline stats of your heart rate, blood pressure and breathing before they delve into identifying symptoms or recommending corrective courses of action.
8. Accept that learning more equals earning more. If you’ve never run a million dollar business, you don’t know how to run one–simple as that.
But you can learn to run one, even if it is your million dollar business you are building from the ground up.
However, you need to accept right now that learning always comes before “earning” (except in the dictionary). You’ll need to be committed to learning as much as you can about sales and marketing and operations if you want to have a truly success business.
Once you do that, however, the sky is the limit. Knowing and applying those simple fundamentals in a highly leveraged way is one of the reasons many top executives and entrepreneurs earn so much.
9.Don’t discount, add value. Whenever you discount, you are taking money directly out of your pocket and directly from your bottom-line profit. So don’t do it. Instead, create added value propositions all the way up and down your product or service line.
10. Get a coach. Even if you don’t get a business coach at first to help you and guide you in your planning and operation, get someone who is objective and outside of your business you can rely on for nitty-gritty business advice and to hold you accountable to getting results. MacInnis Marketing Coaching packages and Start-Up Marketing Package.
Hope this helps you!