Most successful entrepreneurs have worked in the industry they start their business in, in a related industry, or are very familiar with the products, services, and problems through personal experience.
Success requires courage. It takes courage to start and persevere in your own business. In some ways, starting is often the most difficult part of the whole journey. Remember that courage is really 50 percent fear. Being courageous means having a goal that you believe in. The more deeply you believe in that goal, the more fear you are willing to overcome.
Know your business Financial Metrics. Understanding your business’ financial metrics, and what those numbers are telling you, is critical to running a successful business, knowing whether or not your business is profitable, or waking up one day to find out you’re on the slow march to insolvency and going out of business.
Financial Metrics to keep in mind to run a successful business:
Without business income, or revenue, nothing else happens. Nobody gets paid. Products don’t get delivered. Supplies can’t be purchased. Without revenue, businesses can’t sustain operations.
There are several ways to categorize your expenses, and your accountant can help you with those; but ultimately, you want to know what it costs to do business and whether or not your business income is sufficient to meet those business expenses.
3. Cash Flow:
Inadequate cash flow has rung the death knell for many small businesses over the years. If you’ve ever heard the term, “Cash flow is king,” this is what it’s talking about. It’s not enough to simply have money in your business checking account at the end of the month; you need to understand your Cash Flow Metric.
4. Accounts Receivable:
This is an important metric that you can’t afford to ignore. How long does it take your customers, to whom you offer credit terms, to pay their invoices? If you offer 30-day terms, do they consistently pay in 30 days or do they sometimes go 45 or 60 days.
5. Accounts Payable:
Another number you should know is the average number of days it takes you to meet your business’ financial obligations. If you’re able to effectively manage your Accounts Receivable, your cash flow, and your income, you should be able to keep your accounts payable current and maybe even take advantage of the prompt payment terms you’re suppliers likely offer you.
Qualities to Becoming a Successful Small Business Owner
- Be Passionate About Your Product or Service.Your chances of succeeding as an entrepreneur will increase dramatically if you are passionate about the product or service you offer. Before you even start a business, make sure you’re offering a product line that you believe in and that you feel good about selling to other people.
- Provide a High Level of Service. You will need to provide a level of service that will keep your clientele coming back on a regular basis.
- Always be Ready to Sell (or Market). When you go into business for yourself, you are two-parts salesman and one-part technician. You’ll have to be selling all the time — that is how you will build your business.
- Put the “80/20 Rule” to Work for You. You’ve probably heard of the “80/20 rule” — which generally means that 80% of your production will come from 20% of your activities. You can count on that rule when you have your own business.
- Don’t Get Sidetracked. Your business and its success have to become your primary drivers in life.
- Never Give Up! If there is one quality that separates business success stories from business failures, it’s relentlessness. If you are going to start a business, you have to do what is necessary to make it succeed. You will face obstacles and there will be times when it looks like your business effort is a complete failure. That is exactly the time to not give up!
In your journey as a small business owner, there will always be new things to learn, but the concepts above are foundational. Keep them in mind when forming your marketing strategy, and you can expect success.
Tags: Entrepreneurship, Successful Business
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