10 Things To Consider Before Starting A Business
By Barrett Baker
Starting a business and being your own boss is something many people think about, yet only a small percentage move the idea forward. The Hampton Roads Chamber wants you to know that you don’t have to go it alone when you decide to create and operate a company.
“The Hampton Roads Chamber of Commerce is in the business of setting the conditions for other businesses to succeed,” says Bryan Stephens, President and CEO of the Chamber. “We do that through our economic development efforts, our workforce development efforts, our infrastructure development efforts and through quality of life enhancement. The Small Business Development Center, which is a very important affiliate of the Chamber, is specifically designed to assist small businesses to give them the mentoring, counseling and information they need to be a success.”
The Hampton Roads Chamber shares 10 things you should know about starting a business:
1. Know your numbers: Do you understand the information provided in your financial statement? Do you know the difference between margin and mark-up? What are the industry standards for your business, and are you in line with them? How much does each item contribute to your bottom line?
2. Beware of creeping costs: You must be ruthless in controlling your expenses. Costs always seem to increase. Do you really need what you are going to purchase?
3. Time management: What is the ratio of productive versus non-productive hours during your workday? There are 12 federal holidays during the year. If you work a 40-hour week, that means you only have 2,000 hours to generate revenue for your business. What is the ratio of time you are selling versus doing other “stuff” that’s not contributing to your bottom line?
4. Buy your brains: Surround yourself with people who can help you minimize the “non-productive” hours in your workweek. Have an accountant, banker, attorney, insurance agent and business advisor on your management team (see #3).
5. Customer service is paramount: The customer is not always right, but the customer is the customer! You should give them the experience of their life with each transaction. Do whatever it takes to turn them into “raving fans” and therefore repeat customers.
6. Do not compete on price: A synonym for “low-cost” is “cheap.” Do you really want that reputation? Your competition has deeper pockets than you and can wait you out. Every time you drop your price by 10 percent, you must sell 25 percent more product (see #1).
7. It is not the plan but rather the planning: Business plans are great, but it is the planning that goes into them that matters. Make sure your numbers match what you say you are going to do.
8. Remember ABS-ABC: Always Be Selling-Always Be Closing. You cannot turn off. You must be turned on and aggressively seeking every opportunity.
9. Do not be afraid: Never take counsel from your fears. No one ever said running a business is easy. Hard work and determination are the keys to success.
10. Don’t go it alone: There are all sorts of programs to help you start and/or grow your business. Take advantage of what is out there.
Are you ready to be your own boss when starting your own business? Read more in our checklist here.