Many businesses can’t survive their first three years and there are many factors for that. The lack of know-how among new business owners can be quite catasthropic for them. For this reason, it is important to ensure that our new business can survive the intense competition in the marketplace. Before eastablishing our business, it is important that we have vision and focus; then we are able to stick to them. Unfortunately, many new business owners don’t have clear vision when they start a company. When asked about their goals, visions and missions; many business owners would pause and stutter. Strategy formulation should start very early and from the very top.
The goal, mission and vision should end with customer satisfaction and reasonable net profit for the business owner. It means that visions and goals should be applicable and can be implemented into real actions. A passionless and vague statement, such as “committed to build a better world” won’t inspire employees and consumers. Instead we should have a clearer statement such as “introducing new functionality to consumers each year”. Many manufacturers of mobile devices are capable of doing so. Company statement should be easily articulated by everyone, so they know that all goals should be based on it.
Before starting a business, we should make sure that we have enough cash flow to cover any kind of business operations. Business operations are often highly dynamic and there could be many expenses that are not expected previously. Tight cash flow planning could put new businesses into a big risk, because the industry can be a highly unpredictable place. Things can be even worse if our companies rely solely on credit lines and other platforms of debts. This will put us into severe financial pressure. Many highly indebted companies are out of business, leaving the owner with a mountain of debt. They lose so much money, instead of earning it.
Although we may need to focus on publicity to let people know about our business, it is important that we should rely more on frugality and save money whenever possible. Elaborate business plan may have little value and we should focus more on plans that actually work. Many new business owners focus on how their advertisements look, instead of whether they could encourage consumers. In general, we should keep it simple and try to follow through all of our plans. It is also important for business owners to make sure that the business has good relationship between employees. Everyone should enjoy interaction with one another.
Small business is a small world. It means that business owners can’t afford to have so much conflict in the workplace. Many small businesses start with less than ten employees and any feud can debilitate the entire business operation. Productivity could suffer and things can get worse if consumers feel that product and service quality has been affected. Conflict will likely arise after one year or more, it is important for business owners to detect such conflict and resolve it quickly.