Don't Get Too Excited!

Once your business starts getting more and more customers it’s so easy to get excited and to get carried away. Many businessmen would jump into branching out and expanding their businesses right away.

Expansion is a good way to go. However, one must not go this path without careful study. Again you have to examine where you are financially and where you are with your other resources. Even if you have sufficient capital for the expansion expenses, would you be able to give your whole business enough attention to make it run as smoothly the way you are doing it today?

There are also other considerations like do you have enough demand for your product to get the sales with the same or even higher rate of income you are getting today? If you are getting financing, how much risk are you willing to take in order to pursue your expansion? You have to remember that a loan would mean collateral. And if you are not able to pay your amortization, you could lose not only your business but also your property which was held as collateral.

There have been businesses which folded up because of too much and too fast expansion. The list of questions to consider before expanding mentioned here are not comprehensive. Nevertheless, it is important to stress again the importance of careful study and serious thinking before expanding your business. Do not just jump into something without knowing what it is you’re going to land on.

Sales Are Not Everything

Determining how much one earns can be a tedious work. This is especially so to people who are very new to business. This fact may be one of the major reasons why bookkeepers and accountants have jobs available for them almost anywhere.

It is imperative to know how much you earn in each period. Even if your business is only small or just starting you need to keep track of your finances. It has been a fact that there is a tendency especially of non-formal businesses to run out of capital because business owners usually tend to spend the business funds on personal use. This is not to say that one cannot get funds from the business but only to an extent where the business would still be able to continue to run smoothly. The funds he should get from the business should be limited to his salary and to cleared income only. He cannot just get funds when he feels like it.

To determine your income, always take note of your expenses and then record all sales. Now to arrive to your income figure, it’s simply a matter of finding the difference between the sales and the expenses. If your sales are larger then it means you have a profit. And then if your expenses are bigger, then you are at a loss. But remember that in computing these figures, you only include items that you have spent and sold on the same time period.

Sure it is not as easy as it sounds but if you want your to keep your business in continuous operations, always keep track of your income and your cash flow. Budding entrepreneurs should always bear in mind that this is very important even in small and very simple business ventures.

Read to Succeed!

Someone once asked me why I kept on reading the stories of these successful businesses or why I kept reading these business magazines which only sell franchises and gives business ideas whose market is far different than what we have down our city. Well, it’s always good to read these stories for personal and business reasons.

When you read the success of others, it could inspire you to go into business yourself. If others can do it, why can’t you? One word of caution though. You also have to consider what advantages the business or the business owner already had to start with. Meaning, did he have sufficient capital when he started the business or did he have to seek financing? Did he have easy access to his suppliers? And then you have to examine yourself too and look into those things before you start your own business.

These articles and the business ideas magazines may not be directly applicable to you and your target market. But it is from these readings that innovative ideas spring up from. You always have to keep an open mind when it comes to business. You also have to learn to adapt others’ practices to your business. Just pick up and follow what you can and add your own stuff.

Reading is also for information and information is important in every business. It is not a waste of your time. Knowing what is on the market keeps you updated of the trends and what the market wants and needs. This again is very important so you can suit your business according to your own target market’s needs and wants. If you are providing what they need and what they want, then they will surely come to you.

Can a Good Employee Be a Good Boss?

Can a good employee be a good boss? I guess the answer to this question is it depends. Certainly there are good employees who can be good bosses and there are some who cannot. Likewise, there are good bosses who could never have been good lowly employees.

To be a good employee or a good staff, one must be a good follower. I think that is the first thing. When the boss says to do this and to do that, a good employee would do it right away and finish the job fast and accurately. But it does not end there, however. A good employee should also have the initiative. He must do beyond what he’s been told and do things which would make his work look better and even make his or her boss look good.

The transition then starts when a lowly employee gets promoted or when he starts a business of his own. How will then he cope up with his new role? If he was only a good follower, it would not be enough to make him successful in the new shoes he has to fill. But if he or she has the initiative, there’s a greater chance for him or for her to be a great boss. Because if he or she has the initiative, he or she would know how to steer his team or her own staff to the direction he or she wants to take them. He would know how to direct the efforts of everyone.

Some are born leaders while others have to learn how to lead. But if he or she can do this effectively, then goals will always be met and the company or the business will surely proper.

Make Your Staff Happy

As an entrepreneur, it is highly likely that you would have your own employees. You would need staff to help you run your business smoothly and successfully. Depending on your line on business, you could either be more dependent or less dependent to them in running you day to day transactions.

I think that many would agree that employees are quite an important part of the business. Even if you own the business, you have the money and you have innovative ideas that would surely sell well in the market, all of these would be useless if you don’t have employees or staff to help your ideas and plans come to fruition.

It is therefore important that as the boss you know how to manage your team. You cannot be too strict or else your employees will bolt out from the company. You cannot be too lenient either or else they would abuse the kindness you are showing them. In short, there should be balance between the two. You should know when you should be strict and you should know when you can give a bit of a leeway to them. Reprimand them but praise them when you need to. A happy staff would equate to a happy working environment, which would then somehow equate to happy customers. And happy customers would mean more business for you and more success for you as well.

Pricing and Promoting for Success

Pricing is another way of promotion. As I’ve mentioned before, offering 50% discount is a good way to get your customers coming. But what do you do about pricing? Or, how do you want your pricing to be when you are just starting out your business?

One way is to offer your products or services at low prices in order to penetrate the market you want to enter in. This strategy is commonly used in mass products since customers in this market are usually price sensitive. We are talking of products that people use daily like sugar, milk, coffee, soap and the like. A slight different in price can make them change from one brand to another or buy an item from another store rather their usual outlet.

But if you want to recover your cost quickly, you can price your products as high as possible. Costs are rapidly recouped after selling only a few items. This is usually done when selling luxury goods like cars and jewelry.

Another strategy is when you price your goods high at the start and then slash it down later. This way you also recover your cost almost instantly. Then you get more clients as your price goes down. This strategy is utilized in technology items like computers and cell phones.

Again, you have to suit your strategy with your target market and with the type of products or services you are providing. These two should always match your strategy to be effective and to be successful.

Promotions Raise Your Sales

What comes to most people’s minds when they say marketing is promotions. The truth is promotions are just a part of marketing. However, it is also important that businessmen know how to do promotions properly.

The first thing to remember is that although it is a must that you have to invest in promotions and money would be spent on it, it is also important to balance it with the additional sales the company or the business is going to get because of this initiative.

The most common way of doing promotions is offering 50% discounts. It is actually usually an effective way of attracting customers. Most customers cannot resist big discounts. But you also have to be conscious of the signals that you want to give out. Another important thing to bear in mind also is your target market.

If you are selling goods that draw sales based on the brand, you have to invest more on PR so much so that your brand remains top of mind on the brand conscious people. You can accomplish this through media ads on the radio, magazines, television and now also the internet. Another good way to do that is to give out promotional items to your customers and even retailers.

If you are just about to introduce your product, joining trade fairs is a good option. Through these events, you will meet potential clients and even suppliers from whom you can get your raw materials from. You can also learn from other providers in your industry and be updated on the industry trends.

There is no one answer to your needs, you just have to adapt to your market, budget and purpose. You don’t have to follow traditional ways of promoting your product and it need not be so expensive. You can be a creative as you can be as long as you achieve your goals for doing your promotions.