Adams Rules for Small Business Success
1 Have a clear-cut strategy!
A good strategy immediately distinguishes your business from those of your competitors, and gives your customers a solid reason for choosing to do business with you.
A good strategy should be developed after considering the market, customer needs, the competition, and your business's relative strengths and weaknesses. While the strengths of large, established competitors may seem overwhelming - such as deep financial resources and an established customer base - any new firm has built-in advantages too, such as more flexibility and the knowledge of how existing firms have already positioned themselves in the marketplace.
Many small businesses try to be all things to all people - which is really having no strategy at all! Even if you do everything else right ... it will be much harder, if not impossible, to succeed in business if you don't have a decisive strategy!
2 Test your advertising
Having bought advertising in every media from TV to subway cards, and having sold advertising for the newspapers, magazines, and phone books that I published, I have seen plenty of successful businesses built largely on the power of advertising. But creating successful advertising is a lot trickier than it may appear. Even the largest corporations and the most prestigious ad agencies find it difficult to create advertising that consistently works. So whether you're starting a company or managing an established one, don't spend a lot of money until you are sure that you have found a marketing mix that works for you!
With whatever advertising method you choose, you can greatly increase your chances of success with what I call "cheap marketing tricks," such as new customer specials, coupons, trial offers, events, exclusive offerings, give-aways, and more. Save the image advertising for big, rich corporations - small business advertising should focus completely on leading customers directly to action today!
3 Follow a plan and a budget!
Develop a plan before you start your business and update it at least once each year. A plan and a budget help you attain higher goals than if you just plugged away at your business one day at a time. If your company starts to go in the wrong direction, a plan and a budget will provide an early-warning system and help get you back on track.
You don't need accounting experience to set up a budget - but you do need to be very meticulous in projecting and recording each expense and every sale.
4 Guard your cash like King Midas!
As a small business owner, you are going to be fighting a constant battle to hold onto your cash. Overruns in start-up costs, lower-than-anticipated profit margins, and sales that grow slower than expected are among the most common cash drains on new businesses. Even established, highly profitable, fast-growing businesses often run out of cash because of the need to finance growing inventories and customer receivables.
You will also find that well-meaning employees will constantly be suggesting new ways to spend or invest your precious cash. You are going to have to pull in the reins and say "NO. NO. NO." to the many different demands on your money. You need to learn to project cash flow with a fair degree of accuracy. If you don't become disciplined in controlling your cash, you can get into trouble very quickly.
5 Watch your profit margins!
Many small businesses focus to much on sales and not enough on profit margins. And many underprice theirs goods and services. Can you increase your prices? Even if you can, it's crucial to keep your costs down!
Let's say you have a profit margin of 5 percent. If you're able to lower your overall costs by just 5 percent, you can double your profits! But to raise profits the same amount by increasing sales you would have to increase sales by 100 percent! A small change in your cost structure can go a long way toward improving your profit margins.
6 Treat your people right!
Virtually all employees want to work hard to help your business succeed. Treat them right, show interest in them, and compliment their every success. You'll be much more likely to not only retain them, but to keep them motivated too! Otherwise a lot of money and time can be wasted hiring and training new hires.
7 Beware the friendly salesperson!
Once you open your small business, you are instantly going to be a prime target for every salesperson within calling range. New business owners often have a hard time saying "No," until they get burned buying something they don't need. Salespeople are not here to help you! They are there to separate you from your cash! Chances are that when you are starting or running a small business, you need your cash a lot more than you need what they are selling.
8 Worship your customers, but don't give away the store!
It is important to create good products and run an efficient business, but you also need to be responsive to the needs of customers - even when doing so may sometimes require changing the way you are currently doing business. Listen to your customers' comments, and do what you can to give them what they want. But don't give away the store! Be sure that at least over a period of time, you are realizing a good profit with every customer, no matter how much they spend!
9 Have fun!
Just because many other businesses are boring stale, routine places to work doesn't mean that your business has to be too! Make work fun, exciting, and challenging for your employees, and you'll find that in addition to happier people you'll have less turnover and higher productivity. Besides - you just might have a little more fun too!
* Source Streetwise Small Business Start-Up