Starting your own business is a time of both excitement and anxiety. Everyone knows about the difficulties and the risk of failure, but you have decided to take the plunge anyway. Great. I wish you every success. But here are five things that are essential to your ability to succeed.
- Focus on finding customers first, then turn it into a system.
The biggest mistake new business owners make is to invest a lot of money into marketing collateral and websites and even products and programs, before they ever know if they can find a customer. Until you know you have a product or service people will pay for, all this could be wasted.
Another mistake is the flip side; starting a business based on a contract with one customer. If you don’t find more customers, you don’t have a business. You simply have a new job with less security than the job you just left.
For start-ups, finding a way to generate leads that become customers is the biggest key to success. The majority of your efforts first should be invested into finding a predictable and scalable method of attracting and converting customers. Once you can do that, and systematise it, you have a business that can succeed.
Many businesses never achieve this and are always struggling to find enough customers to get past survival. For businesses like this, every dollar spent on advertising and marketing is a gamble. You want your marketing dollars to be a secure investment that reliably provide you with a positive return on investment.
Make this your primary goal before investing in marketing. When you have a reliable method to find new customers, you can then expand your investment with confidence.
- Understand your numbers.
Many start up businesses fail due to lack of management capability and failure to manage the critical numbers. The key numbers to understand are:
- Your break even point
- Your profit margin on each sale and total sales
- Your cash flow requirements
- Your daily/weekly/monthly sales and leads generated
- Your cost of acquiring a new lead and new customer
- Your average sale value
- The average frequency of sales to existing customers
- The average time to collect money from customers
- The cost of providing each product or service.
- Define your vision and mission and make them inspiring and compelling.
Many people overlook the value of a vision and mission statement and many vision and mission statements are meaningless platitudes. But if you want your business to grow and become something people talk about positively, having both a vision and mission that are inspiring and compelling is a must. You need to be clear so that your employees are totally engaged and committed to the mission.
You want people to be attracted to your business, not disinterested. Having an inspiring and compelling vision and mission are key to achieving that aim. You want people to know exactly what you stand for and what you want to achieve and you want your customers particularly, when they read or hear your mission, to be so inspired they are compelled to say, “Wow, I want some of that!”
- Create your plan for scalability.
Many new business owners fear growth and feel there are too many headaches in growing a business. My experience is that the opposite is true. The headaches come from not planning for scalability.
The reality is that if your business produces a product or service people want, your demand will grow and you will have to manage more customers. That will require additional resources. If you fail to plan for this growth, you will have plenty of headaches trying to manage all the requirements reactively. You need to plan to grow with scalability in mind, so you can predict your needs and organise everything in advance.
- Get a mentor.
One of the biggest mistakes new business owners make is trying to reinvent the wheel on how to succeed. There are many successful people who are available to provide advice, support and guidance. Having a mentor to help you avoid all the expensive mistakes is one of the most reliable ways to fast track your successful business growth.
About the Author:
Greg Roworth is a business growth specialist and author of Run Your Business on Autopilot – How to Leverage Your Business for Maximum Profit in Minimum Time. He specialises in assisting smart but frustrated business owners to discover their unique market positioning and to quickly leverage their business by attracting more ideal clients and building the systems to run their businesses on autopilot. He currently leads a team of business growth specialists as CEO of Business Success Systems. To contact Greg please visit www.BusinessSuccessSystems.com.au or email him at greg@BusinessSuccessSystems.com.au