8 Tips for Entrepreneurs (Part 1)

Solution vs Problem Solving - Business ConsultingRunning a small business is not a whole lot different to running a large business. The only real difference is one of scale. The key issues are always the same. So here are some tips for would-be entrepreneurs:-

1.   Control your costs

Money comes into your business and money goes out. It’s that simple. However fail to ensure that the former is always greater than the latter and trouble will follow at some point, whatever the size of your business. A bigger business might be able to weather the storm a bit longer but the consequences will be the exactly same. Keep losing money and eventually your business will go bust. Take every opportunity to maximize your revenue and always keep your costs as low as you can. Don’t spend money unless it is absolutely necessary. Ask yourself, do I really need to spend this money? What will I get in return? Can I achieve the same result at less or even no cost? It might surprise you to learn how frequently it is possible to avoid cost, whilst still doing all the things big businesses do. The key message here is that you must keep an iron-grip on cost and you must manage the flow of money.

2.   Do your own market research

Every product should solve a problem for your customer and you should have some idea of what that problem is and how your product will solve it relative to the products offered by your competition. Just because you think you’ve got a great product, doesn’t mean you have. Your opinion means nothing if there are not enough people willing to buy your product at the price you’re trying to charge for it. If your product won’t sell then potentially your business could be in trouble. Perhaps you think you’ve spotted a gap in the market? If it’s a genuine gap then you might be on to a winner. However a gap in the market doesn’t always guarantee that there is a market within that gap. Maybe there’s a reason for the gap which you’ve yet to understand. In business, the trick is to find out what people really want and then offer it to them. How do you find that out? Why not simply ask them yourself? Not just your family and friends, they’ll be far too polite to give you any meaningful feedback. Talk to customers and potential customers. You can always conduct some of your own market research in your local shopping mall, or wherever you think your target customers might congregate. Identify some basic questions, stand there with a clipboard and just start asking people. Often they will be far more helpful than you might expect. And you can always use the Internet too. Search engines like Google have keyword search tools which are free to use. These tools allow you to get a ‘rough and ready’ measure of what people are searching for and how frequently. Market research doesn’t have to be expensive. As a small business entrepreneur it is possible to do it yourself. You don’t have to spend a lot of money on this activity but it is essential that you do it. Your results might not be quite as scientific as those produced by the professional market research people but they will provide you with a rough guide and that will be good enough in the first instance.

3.   Advertising costs money: is there a better way?

It is true that visibility for your business and your product is essential. You might have the best product in the world but it won’t sell if potential customers have no idea that it exists. So how do you ensure that customers have visibility of your product? At this point most people might respond by saying advertising. Well advertising is an obvious solution but it can be an expensive one too. One small advert in the back of a glossy magazine can cost you a lot of money and yet you have to ask yourself whether that would be money well spent? How often do you notice the small adverts in the back of magazines? In my case, the answer is not very often. With so many adverts competing for my attention I tend to filter them all out. So, if you’re not careful, money spent on advertising can be money wasted. A better approach might be to use some creative thinking with a focus on public relations. Smart entrepreneurs know that business is show business. It’s all about getting noticed. For example the entrepreneur Richard Branson is a brilliant exponent at getting media attention at little or no cost to his business. It helps that he’s a likeable guy but he’s also clever and creative in his approach. If you have an interesting back story perhaps the local press, local radio or even television might be willing to run a story on you and your business and the products you have to offer? Social media is powerful means for gaining attention for your business. Social media is also a useful way of driving traffic to your company’s website. And make sure that your company website is suitably optimized for search engines. You need to appear on the first page of a Google search if there is to be any chance of anyone noticing you and your business. Make sure you offer visitors to your company website the opportunity for signing up to a regular email newsletter. Give them an incentive to sign up. This could be a free report or perhaps a discount code for one of your products. How about running a competition using your company’s fan page on Facebook or your company website? The price of say a smartphone or a Kindle or other electronic device would be cheaper than the cost of a small advert in a glossy magazine but it’s more likely to get noticed and it will probably generate a lot more excitement. If you have a car or van; it can be emblazoned with your company logo, your website details and product information. That is then free advertising as you’re driving around. Park it at a big event attended by thousands of people and you’re beginning to master the art of guerrilla marketing. Creative thinking and public relations can produce powerful results in your quest for visibility at a fraction of the cost of advertising. The key message is; be creative.

4.   Don’t make yourself indispensable

The biggest mistake any entrepreneur or business manager can make is to think that every decision should be made by them. If you’ve started a business from scratch you tend to form an emotional bond with it. It becomes your baby and you become very protective of it. That is natural but as the business grows you will have so many things to do that you couldn’t possibly do them all. You could try, of course. However if you try to do everything you’ll find yourself falling behind in key areas like product sourcing, sales and keeping your accounts up to date. Fall behind and it becomes very hard to catch up. Potentially it is also very damaging for the business. So you have to learn the art of delegation. A good start would be to document every task and process within the business and then create an Operations Manual. This can include everything from the preferred method for answering the phone to completing invoices and dealing with complaints. It can include the degree of flexibility which you are delegating to staff, so they can get on with basic tasks allowing you to get on with those activities which are much more important for achieving business success. No business should be dependent solely on one person. If it is and that person gets hit by a bus then obviously the business would be in serious trouble very quickly. Delegate basic activities to your staff and you can be sure that the business will continue to function even when you’re not around. It will also give you a bit more thinking time for steering to the company towards bigger and better things. The key message here is that you must delegate. Never delude yourself into thinking that only you can do a particular task.

That concludes the first part of this article. In Part 2, I will look at issues around pricing, technology, goal-setting and new ideas.

© RJ Sutton and Mann Island Media Limited 2014. All Rights Reserved.

(Visited 3 times, 3 visits today)
Show Buttons
Hide Buttons