Building your business basics
Once again many of these seem quite obvious but they are well worth reviewing.
A business becomes a self sustaining entity. In order to become self sustaining certain fundamentals need to be in place.
- The business needs to spend less than it earns and save a little.
This is the difference between profitability and unprofitability. Ideally the business should also be able to set aside a portion towards savings so that it can cater for unforeseen expenses that will arise in the future. Savings are not always placed in a bank. In some areas with high inflation or unstable banks alternative methods of saving should be explored.
If this business cannot accomplish this basic then it will not be a success and is not reasonable to pursue.
- Debt can cripple the best of businesses.
It is wise to avoid debt wherever possible but where business dept is necessary and manageable it can be a helpful tool in growing your business.
- Insurance can provide a safety net.
Depending on the risk levels and nature of your business and if appropriate and scrupulous insurance mechanisms are available, insurance can mitigate high risk levels. For an individual business owner health or disability insurance can assist in mitigating loss were one to become seriously sick or disabled. Key personnel in a business can be insured to enable the business to continue in the event of some unforeseen human resource issues.
Having said this insurance premiums can also be an unnecessary burden so insurance requirements need to be evaluated carefully and adjusted regularly.
- Planning is key
Some of us can get by in life by "winging it", for most of us it's best to plan things. The same is true of business. Especially as the business grows and becomes more complex failure to plan could lead to significant difficulties.
A basic business revolves around four key areas:
- customers
- costs
- sales
- profit
Our planning should focus on all of these areas if we are to be successful and we will delve into each of these areas in more detail in the future.
Wao great idea this is ,alot of people dont know about that part called planning ,it is huge part in business ,a lot of people just go into buiness without good planning skill and when the business fail ,them find unavailable reasons .nice 1 there bro
I agree, I understand the impatient urge to just begin but a sensible amount of planning can help in the long run. That said, I try to be mindful of over planning because it can lead to procrastination, delay and lost opportunity.
The time it takes to turn a profit will vary between industries and individual businesses, but the rule of thumb remains the same: have enough cash in the bank to survive for six months or more before you launch. Developing a realistic personal and business budget can help you survive the first few months, and sticking to this budget will be crucial to success.
Also,
Before starting your own business, make sure you can mentally and physically ensure the journey. Be prepared to work long days, do things that are outside of your comfort zone, make personal sacrifices, work hard for what you believe in and dedicate yourself fully to the businesses success. If you aren’t in it 100 percent, the business won’t achieve its full potential.
"If this business cannot accomplish this basic then it will not be a success and is not reasonable to pursue" I like this quote, it really makes sense. Nice post please continue. You got my upvote on this.
I want to add one more thing that a business should be honest and never try to deceit anyone. Then only he can be successful in long term.
By the way nice post. Thanks for sharing your thoughts with us.
Well, we can require loans to grow our business but not to start. i have seen a number of people asking for loans before even having a running business. Requesting for a loan requires a deep knowledge of the business, the various cycles and fluctuations in a particular market.
A loan is a risk, yes a great one. It encourage an individual to work hard but also can lead an individual into a huge loss. not only of the business but also of the other properties linked with the loan.
Understand your business and know your market.
I like the customers aspect. You need to communicate properly with your customers in order to know what they want. Is it adding small features to the product or redesigning the product. This is very important when in a very competitive market. Thanks for sharing
Thank for this business tips. I think this is one of the basics needed before embarking in any business. I just want to add that one also need a business ideas and also be innovative on any business he or she chooses especially in competitive business environment. That is one way one can spend less than he or she earns and still succeed especially in a competitive business environment.
Good read @sme! It's always a good idea to review the basics as they are so crucial to know but can often be forgotten
In my own experience I can get oaverwhelmed by perceived complexity and forget some of the basic fundamentals.
Some useful advice as i embark on the process of starting my own business
I have been thinking of starting my own business for a while now,and these are very useful points to consider,thank you for the post,on your point concerning insurance,do you suggest that one can do without insurance if the business is not having any high risk levels.sometimes insurance is very expensive if the business is just starting.
If the risks are not to great then insurance can be a luxury you can skip on in the early stages. It should be evaluated and considered depending on the stage the business is at.
Thank you