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Small Business: To Succeed or Not to Succeed

How is it that some small businesses grow and succeed, and others fail? Every business owner has the same amount of hours in the day, so what is it that makes some businesses flourish over others?

It may be hard to pin-point any one specific reason, but here are 10 reasons why a company may fail:

  1. Limited or lack of funding or financing.
  2. No business plan.
  3. Failure to implement goal setting.
  4. Lack of owner’s skills in industry.
  5. No marketing plan.
  6. No budget in place.
  7. Faulty accounting or financial recordkeeping.
  8. No networking or creating relationships.
  9. Failure to have BAIL plan in place.
  10. Lack of staff to keep up with demand.

Those are a lot of reasons why a business can go wrong, but there may be many more, and in different combinations.

The best way to go into a business is to PLAN AHEAD! Winging it, not having goals to achieve or a map to follow can easily lead to failure – fast.

There are many resources to help you along the path of starting a new business.

How can you put yourself on the road to success? First of all, stay as far as away from #1-10 above!

Make sure you put your BAIL system in place. What is a BAIL system?

B – BANK
A – ACCOUNTANT
I – INSURANCE
L – LAWYER

Don’t try to do it all alone! You may have a great concept, big idea, and grand plans for a great product or service, but if you try to wear all the hats, eventually you will be working only “in” your business and not “on” it which can lead to potential growth problems.

If cash flow prevents you from hiring on employees, another option would be to outsource. Outsourcing is the hiring of contractors in various fields (web design, bookkeeping, graphic design, administrative assisting).

Some small biz owners may be opposed to outsourcing because frankly they don’t know where to start or they may struggle with the ability to trust someone they don’t know with their business.

There are many ways to approach this issue. Perhaps the best way is to start small. For instance, hire a virtual assistant to perform a small task such as answering e-mails or typing correspondence and then build the relationship from there.

Ways to find contractors would be contacting your local SBA, chamber of commerce or other local organization. Another great resource is the internet. Web sites such as Guru.com, E-Lance, Fiverr and Odesk have thousands of contractors ready to help you on your projects, and many are very reasonably priced.

A small business can be fun and adventurous, but it also requires a lot of planning to succeed. Create that road map, have procedures in place and work “on” your business to maintain its success!

How To Mix Business With Pleasure – A Close Look At Business Structures

Business is business but it is certainly not a pleasure when you have friends and families in it. Can individuals such as families or close friends mix business with pleasure? The only way you can do this is when you are a sole trader or partner in business and you incorporate the idea in a legal way. No other interpretation could be drawn outside of this perimeter. A company has many statutory obligations and it is more bureaucratic, which make it more difficult to mingle. We will use this perspective to look at various business structures, while we see how we can profit by mixing business and pleasure simultaneously.

Sole Trader

If you are a sole trader, you stand the risk in any business venture. If you have a friend in the business you can include this person as an employee and not as a partner. If you do, then the status of the enterprise is a Partnership, which will be explained further but in this structure, it is a different ball game for your business.

There are legal implications that involves your operation when you decide to join together with someone, so it is important that a contract is prepared before you take on this responsibility. You must also decide whether your friendship is worth the risk if you want to have your friend working as an employee in your business.

Partnership

A partnership is the joining of two or more persons with the intention of making a profit. Partnership involves specialized individual with skills that are integral to the business. When this is so, they normally pool their resources together and work together with the intentions of making a profit. Examples of Partnership are Lawyers, Accountants and Contractors.

There maybe someone in the Partnership that has a specialized skill such as an Accounting certificate who can manage payroll or someone who has HR skills who can train others professionally. When this is so, they are normally compensated separately in the appropriation of profits. This means they are contracted to be paid more when profits are shared.

If school mates from college want to start their own accounting firm, they must understand their rights, duties and responsibilities before they carry out their functions as partners. They must not take it for granted that they were class mates.

If someone comes into the partnership with additional skills, example: a Lawyer with an accounting credential, it is expected that he is to be paid more. If a friend or partner decides that he doesn’t want to be part of the day-to-day running of the business but only want to invest, his share of profit must be worked out with an agreement from the rest of partners. this must be recorded as a legal document in the Articles Of Incorporation or Memorandum Of Association, and placed on file.

Companies or Corporation

The company involves the incorporation of seven or more persons whose liabilities are limited. This means that all parties are not obligated to use their assets if the company is wound up or becomes bankrupt. All liabilities are under the entity as the company is a single entity. On a larger scale, this type of business structure never normally incorporate close friends, unless it is a family business.

The skill set of employees are generally fished and recruited from the public. Some family business are corporation and they struggle to keep business together after years as nepotism and dictatorship stifles the operation.

Companies are regulated under the companies act and carry strong federal policies and regulation. The laws for the sole trader and partnership are governed by the state but Company operation carries stiffer penalties, statutory regulations and more regulated polices.

Separate And Isolate

We must separate and isolate as mixing pleasure with companies can have serious consequences. It is reported that many companies are sued because they fail to follow basic ethics. They not only feel the long arm of the law but they suffer socially when their practices are unethical.

When you mix your personal relationships with business you stand to lose and when you decide to make a profit, count your friends out. But when you value your relationship with your friends and you still need them in your business, separate them from the pleasure of friendship and be extremely professional.

The only way we can enjoy business with pleasure is to put your friends in your business as legal partners or committed employees, let them be distinct and never mix both.

Seven Rules for Business Success

It takes more than adequate capital and an endless desire to start a business. Success comes from preparation, planning, and using right techniques. Planning allows you to predict where your business will be in the future. Constantly offer a quality product and placing yourself in the mind of your customer will enhance your productivity. Following is a list of suggestions outlined that can keep you on the path to business success. It may not be procedure for a thousand; rather it is a set of established guidelines that can help to enhance your business.

1. Self- Preparations

As a professional, you must put yourself in order from beginning of your business operation. Every person you communicate with is a potential client. You must impress your customers with your competence and familiarity on the specifics area of your dealing. Remember, you may not have another opportunity to another time. You have to get yourself ready!

2 Perpetual Optimistic

You must be confident that operating a business is just another part of your life. Establishing a business has never been easier, but if you thought it would be, you may have chosen the wrong career pathway. Remember, that there will be good days and bad days. All to do are to continue to focus and realize that there is always a better tomorrow. When things get tough, take a deep breath and stay positive.

3. Listen intimately to your customers.

Good businesses are customers driven. Listen closely to your customers needs and react as quickly as possible. Gaining your customer attention will create a trust that will bring them back to repeat business with you. Reliable customers also give free direction to others to patronizing your business. Focusing on customer service as a way to differentiate your company grows your business and increases your sales.

4. Striving For Good Reputation

Your company needs a reputation. The key to business reputations is a way to offer superior services and products to your customers. Your company is only as good as its reputation. Let your company aim at accuracy and excellence every time. Companies with good reputations are highly recognized. You must strive for right reputations that will enhance your productivity.

5. Consistently Innovations. Always aim for way of using newest technologies and techniques to improve both your products and services. The companies that fail to creative are often left behind, while those that advance easily moves ahead. Stay informed on the newest technologies and products innovation, marketing strategies to improve your customer service approaches’ and building your company reputation. Innovations give way to offer superior services that distinguish your business.

6. Spend More to Make Money.

This is almost hard truth to any businesses. However, if you want your business to be the best among your competitor, you have to spend money to make more money. Spending money to generate new ideas, to improve your products and services, research to get the best technology and hiring the best staff in your organization. You want the BEST, spend money to make money.

7. Prepare for Success.

Success comes from preparation, strategy and innovative techniques. Planning increases your chances of success. Continuous Planning allows you to predict where your business will be in the future. Forecasts economic fluctuation and then adjusted your production and promotion help to increases the success of your business. Though, you may not plan for everything, but having a plan in place will leave you far more ready and make your business gain the ground when change inevitably comes.