The Tri-Fold Aspects of a Wildly Successful Business
When a new business owner starts his or her new business, it is usually based on an intense desire for freedom from the ‘rat race’ coupled with the nagging idea that they can do it ‘better’ than those they have worked for. The struggle that a lot of newbie business owners have is the incredibly different areas of running their new business that they are not at all familiar with at all. They may have spent years learning their craft under the instruction of their employers, they may have honed their skills and become even better than the one employing them.And yet, while having the skills to perform the work, they don’t have the knowledge it takes to create a successful and wildly thriving business. An auto mechanic may know cars inside and out, but his knowledge of his work is only one third of the equation. And one third of a successful and wildly thriving business usually leads to a going out of business sign in the window in a little less than a year and a half.This article will explore these three areas, which when properly integrated creates a synergy (a force of differing areas working together toward a common goal) that makes a business successful. The old axiom of location, location, location is out. Despite high gas prices, if your business offers a unique experience for your customers, they will drive past a dozen similar businesses to get to you. They will pay higher prices, happily, to get what you offer. The first of these tri-fold areas is marketing.1. MarketingMarketing is what brings customers to your door. Unfortunately too many business owners place their ad in the yellow pages and think they have done their marketing for the year. Contrary to the commercials featuring one of the coolest kung-fu stars prior to Chuck Norris however, you can’t depend on the yellow pages to get customers rushing to do business with you.
With marketing you have to remember a few simple rules:a. Great customers do not just appear; they are made! – if you believe that your business has something to offer that similar businesses don’t, (and if you don’t believe that try another line of work) would you rely on one marketing source to get customers to your door?b. Nothing happens until you make a sale – Many business owners spend a lot of money and time ‘getting their name out there’. Unfortunately, they go about it in ways that too often do not benefit their company. Free samples are a great way to get people interested in purchasing your product (when financially feasible), but it’s not always beneficial to become known as the ‘sample’ store.c. A deal is only good if it is good for both parties. – One business man a few years ago saw a growth in the demand for trailers. He took the initiative to contact several companies to get bids on creating his idea. One company was significantly lower than the others were. The business man contacted them to verify the accuracy of the bid and he was assured that it was, so he ordered 200 trailers. As the last of the trailers was being sold, he contacted the company to order 500 more when he was told that the price would more than double because they had forgotten to account for some of the costs in the original bid. The business man had to go through the process of finding a supplier again.Advertising is good, but a lot of advertising is simply money out the window. Marketing involves getting customers to your business, it also involves keeping the customers you get. In order to be wildly successful, you have to continue to market constantly, to get them in the door, to keep them coming back and to get them to refer friends.But constant marketing is not advertising in every source available, if you did that, you would be broke quickly. You need to focus your efforts on those that need your services. Paying for an ad on the local bus for your jewelry store is a bad idea, why? Because those that ride the bus are not likely to be able to afford jewelry. If you groom dogs, you need to market your services to people who actually own dogs. (Vets offices, Puppy Stores, etc.) Focused marketing is the subject of another article coming soon.2. ProductionThis is what you do! Auto repair, accounting services, retail store, whatever! Your ability to perform this service gave you the idea and the courage to step out and begin your own business! Production is a profit center for the business with revenue and expense responsibility. Production is also what you do with the customer once the marketing has gotten them through the door and includes the time of the first sale through the entire relationship with the customer.This is where many business owners spend 100% of their time and subsequently go out of business. Unless your marketing is working in concert with your production, then all you have is one third of a successful business.Your employees are a big part of your production because as much as it costs to get customers to your door, it costs much less to keep the ones you get. Communicate with your employees and let them know what your company’s goals are many times a brainstorming session with those that encounter customers on a daily basis can help generate ideas you had never considered.
If the costs of your production puts you out of the market, then they need to be controlled! If you aren’t charging enough to be competitive, STOP! A couple of years ago, a store opened up here called CPR – Cell Phone Repair. Now, the owner may be the best repairer of cell phones alive! But seriously, who gets their cell phones repaired nowadays? With $30 phones, repair isn’t really a viable option, how much research did he do before paying to open his store? He closed within a year and a half.But if what you have IS in demand, remember that production is an essential third of your business. But how can you know that the marketing and production are working together? By the use of the third aspect, accounting.3. AccountingWithout exception, accounting is the most neglected of the three areas. Whether it’s because the business owners have an inaccurate idea of what accounting entails or they don’t believe they will be busy enough initially to justify the expense of accounting software or help from a professional, accounting gets pushed aside. Accounting helps you keep track of the costs involved in selling your products or services.Without accurate costs and accounting you could be spending yourself out of business without realizing it. One client I had always had cash on him, he was taking payments from clients on a month to month basis and honestly believed he was doing well. But his failure to keep track of what he was owed ended up costing him over $75000. One client was figuring his costs in purchasing items for resale, (and he was much cheaper than his competition) but failed to accurately account for rent, payroll, taxes and utilities. When I showed him what those costs were on a daily basis, he was forced to raise his prices and ended up more in line with his competition. He’s doing better now with fewer customers than he was. If you do not have software for accounting, you can get the Simple Start of Quickbooks for free either by download or go to my website and I will send you a free disc.SynergyWhen your marketing, production and accounting work together synergistically you will have a better idea of your revenue, expenses and can use that information to create clearer goals. Where these aspects converge, the profitability of your company increases. That is the goal of any wildly successful business.
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