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Starting, Operating and Growing Your Small Business - In Any Economy!

The economic environment in which a small business has to operate today is challenging to say the least. The good news is you can succeed as long as you apply some basic commonsense smarts to every aspect of your business. Become stronger and more focused and you will overcome the challenges and move forward. Remember, every business starts at square one and then moves forward from there. It can be done. Always know where you are in the small business life cycle, and act accordingly.

Stage 1 – Dreaming

In this stage, you should:

• Seek guidance and advice
• Focus on the “FANAFI” principle – that is, find a need and fill it.
• Anticipate that other companies will see the same opportunity
• Be realistic

Stage 2 - Planning 

Realistically, to plan your business, you’ll need to develop the answers to eight questions:

• When are you going to start your business? genuine
• Where are you going to start it?
• What are you going to name the business?
• How will you position your business?
• How are you going to determine your capital needs and fill them?
• What kind of business structure are you going to establish?
• How many employees will you need, and what will they need to accomplish?
• What will be the policies applied to these employees?

Answer these questions thoroughly and you have your first draft of your business plan.

Stage 3 - Implementation

Your goal here is to make sure all the right pieces of the puzzle come together at the right time.

1.      Start by looking at your internal resources

2.      Try accessing the best outside sources of help and information. Try looking in these places:

• Books, especially those written by people who have met the specific challenges you face.
• Magazines which can tell you what’s likely to happen in the near future.
• Reputable and trusted Internet Web sites.
• Training videos and DVDs put together by organizations with specialist information.
• Computer software packages available from your local computer store or from a Web site.
• Seminars which may be offered in your city.
• Trade associations which frequently have loads of free and useful information available, especially to those who are considering entering the industry.
• Consultants who can provide you with the benefit of their experience with companies in similar positions.
• Your peers and those in your formal or informal support networks.

3.      Put together your own team of advisers – drawn from all the people who have a vested interest in your success. Ask your professional advisers to come to a quarterly breakfast meeting where you can discuss what’s happening and ask their advice. Admittedly this may generate some conflicting ideas you’ll have to sort through, but people like this can provide some valuable hands-on information and tips.

Stage 4 – Growth

For any small business, growth is good. It does, however, bring its own set of challenges. The point is you should not be seeking to grow just for its own sake. Instead, you should be attempting to grow by offering a great product, supplied on time and backed by competent service at a competitive price. If your attempts to grow mean you end up failing to deliver in any of these areas, problems lie ahead.

Competition will be a fact of life as you attempt to grow. Others will be eyeing the same prize you have in mind. Get comfortable with that idea and be prepared to upgrade your marketing in order to achieve the growth you want. Often this means doing some type of marketing activity your business has never before utilized to any great degree. There are eight general marketing vehicles you should consider using to generate the level of growth you’re comfortable with:

• Media advertising
• Internet marketing
• Direct marketing
• Incentives and premiums
• Contests or promotions
• Attractive point-of-purchase promotions
• Public relations
• Customer relations

Stage 5 – Preservation and Evolution

When things are going well for a small business, there is a tendency to sit back and become conservative, focusing more on protecting what you already have. That’s dangerous, because markets and competitors never sit still. The fact is if you’re not consistently pushing forward, then you’re already starting to fall behind other more aggressive competitors.

To avoid that, ask some tough questions:

• Are we still in tune with our customer’s needs?
• Are we willing to evolve the business to its next logical configuration?
• Are we still applying the FANAFI principle?

Stage 6 – Sale or Divestiture

There will come a day when you’ve had enough and you want to cash out or move on to other areas of interest. When that happens, you’ll have seven options available:

• Close your business
• Declare bankruptcy
• Sell your business outright as a going concern
• Sell your business to your partners or key employees
• Take your company public
• Turn your business over to your children or other heirs
• Develop a formal Employee Stock Ownership Plan

Which path you choose is entirely up to your personal preferences. There are advantages and disadvantages to each option. There will also be tax and other considerations involved. The point is it’s better to plan this process in advance when you still have some good options rather than being forced to move one way or another.

Never forget there is an alternate destination you definitely want to avoid.

Things don’t always go to plan in business. You may one day be forced to downsize involuntarily. Just the knowledge this possibility exists should serve as motivation. It’s surprising just how many successful small businesses are a second attempt to get something good going after the first business attempt has ended up in failure or bankruptcy. This kind of meltdown is not necessarily the end of the road.

If you ever find yourself in an exceptionally tight spot in building a small business, there are seven steps you should follow:

1.      Acknowledge you have a problem

2.      Make any cuts which absolutely have to be made

3.      Renegotiate your outstanding debts with your creditors

4.      Sell all your personal toys and other unused equipment

5.      Get some sound advice

6.      Focus on your areas of proven expertise and past success

7.      Draft a workable recovery plan

Whether you’re aware of it or not, many successful entrepreneurs and small business owners fail on their first attempt. If you’re ever faced with the necessity to do a second start-up:

1.      Think regularly about what you need to do differently

2.      Apply everything you’ve learned from your mistakes

3.      Take some noticeable different risks

4.      Work hard at investing your profits more wisely this time around

5.      Think about what pieces of know-how were missing last time around

6.      Make key decisions quickly

7.      Work very hard at building a great team

To build your business, focus on building your assets as quickly as is feasible.

Irrespective of whether you’re trying to build your first small business or whether you’re on your second time through, the key to building a successful small business is to find practical ways to grow your assets. These assets fall into six main categories:

• Yourself
• Your employees
• Your customers
• Your vendors
• Your capital
• Your community relationship

You will always be your business’s single greatest asset. After all, it was your personal drive that got you this far. You bring to the business:

• Your enthusiasm
• Your attitude
• Your knowledge of the industry
• Your skills and know-how
• Your courage to leave behind the security of paid employment
• Your pat experience
• Your goals and ambitions
• Your set of business ethics and expectations

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