I figured it was time to put some of my “money where my mouth is” and cough up some business resource information for a change. So here you go.
Since the beginning of the first business to today the statistics of business failure stay relatively the same. More businesses fail on a regular basis than remain viable. Having been in business myself in a number of fields I have seen my fair share of success and unfortunately utter disasters the past twenty years.
Working hard will not mend a broken business however knowing five simple keys will help you avoid going out of business.
Know your numbers
Sounds so simple doesn’t it? Yet all one need to do is turn on the Food Network and boom you get to watch a “struggling restaurant” owner get advice from a “guru” to help “save” their business. What is always an issue? The numbers, the numbers and the numbers. The owners don’t know their costs. They don’t know how to save. They know how to cook and thought hey I know I’ll start a business selling what I cook….and that typically was the extent of their business plan. Seems a bit silly doesn’t it? You sell a chicken wing for fifty cents but you don’t know it costs your sixty five cents a wing BEFORE you cook it? If you’re not interested in knowing your numbers you might as well take all that startup money and simple toss the cash out the window as you drive down the highway. You’ll get the same result and well the pain will last a much shorter time.
You need to know your costs (fully loaded) so you can price your product or service. How much do you need to earn each day to break even and start making money? Know your costs. Know your break even points and where you want to be in 30, 90 and beyond. Write it down. Simple yet so many don’t do it.
Know your competition
So you love hamburgers and think you want to start a business. Yawn. Almost every food joint sells burgers. What on earth makes you think yours will be any better? In a service business? What will set you apart from the competition? Look this is easy to understand. People purchase from those they know and they trust. Humans are creatures of habit and really do not enjoy change. They may say they want to try new things but doesn’t mean they will make a permanent change. Sure you can do a complete SWOT analysis for your business or marketing plan but do you really know your competition?
How many times has history proven one company is successful in a given field while the company with the original idea vanishes off the face of the earth? Did the startup do it better? Most likely they did. More important they studied the competition and realized a few things. What not to do. Ensure their employees knew that lesson and used it to kick butt all the way to the bank. Hey I’ve referred others to my competitors. Why? Sure I could have done what the customer asked but knew my competitor was better suited to that niche. How did I know this? I sat down with my competitor on a number of occasions to discuss business. Over time I realized to not try and be everyone’s everything helps you streamline your business. Knowing your competitor can make you stronger.
Know your market
Oh the market. Let’s go back to the burger idea. Okay so let’s say you have a new version that you’ve taste tested and the feedback is overwhelming: we must have that!!! Great; now what? You best know your market. Specifically what the customers want. Would opening a new burger joint make sense in the middle of a market that caters to say vegetarians? Not likely. Or you think you found a perfect location to set up shop only to find there are seventeen burger joints within three blocks! Lack of demand in your market would kill you. Humans will drive to have a romantic dinner and a night out on the town. Typically they won’t drive for a burger even if it is fantastic.
Now flip this idea. What if the market has seventeen burger joints in a small radius? What if your idea was to service a new twist on salads, healthier fare and that included Gluten Free meals? Now you have a niche that stands out. A quick test of the people working around in the local businesses would answer the demand question rather quick. So see knowing the market is very important.
Don’t you just love standing in line these days? The ease of ordering online has made standing in line a bear hasn’t it? What is the number one complaint these days? Lack of good customer service is rampant. The service industries are getting slammed. Distracted employees, slow or sloppy service seem to be the mainstay today.
How an owner’s or managers handles this can make or break your company. One poor online comment can mean the difference in foot traffic. Engagement with and handling customer complaints is paramount. Here is an example. Sue ordered an item online from a small vendor. When she received the item Sue could tell is was a return and the item was defective. She contacted the vendor and returned the item. She waited and waited but a replacement never arrived. Months later she contacted the vendor. It had fallen through the cracks and now the item was no longer available. What did the owner do? He returned her funds but went one step more. Although they would not carry the item anymore the vendor contacted the manufacturer and had the item Sue wanted shipped to her. At no cost! Why? He understood his company messed up and wanted to create a fan out of a mishap. Guess what Sue did? Wrote a raving review on his customer service efforts on his website and has purchased more items from them. Great customer service will create raving fans. Poor customer service will kill your business.
Stop doing the same thing over & over expecting different results
Yeah I know the definition of insanity but seems business doesn’t learn the lesson. We’ve always done it this way….still use a typewriter? When was the last time you faxed anything? Do you even have a land line for your house or do you just use your cell phone now?
I’m not saying try every last new thing that comes out. What I’m saying is if it doesn’t work anymore STOP. You are just wasting your time and money.
Bottom line is simple. You can survive and prosper in today business world. Know what you need to know and hustle. Put in the efforts that pay off and please stop making these simple mistakes. After all we want a new tasty turkey fat free burger to munch on don’t we?