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Economic Revival Through Small Business Success
July 21, 2012
By Anthony Azevedo, Big4.com Guest Blogger
Small business success is one of the fastest ways of reviving an economy and generating employment. While many might argue that large corporations employ hundreds of people; they require higher amounts of capital and take on larger amounts of risks. Small businesses on the other hand don’t require millions of dollars in financing and can be structured to survive economic downturns. However, this is not to imply that small business ownership is in any way easier than running a corporation. They are simply two different beasts and must be treated as such.
Ingredients to Business Success
Product and Service Ideas
The first step to achieving business success is having a solid idea. The idea simply needs to be profitable. In order to do that the product or service must deliver quality and provides a solution to a problem. No business can prosper unless its clients benefit.
While this concept seems simple; many new entrepreneurs neglect to pay attention to the value their prospective customers will derive from their business. Instead they rush to establish their companies. Sometimes they even hire staff without having work for them. If the owners don’t have the time or experience to write a a formal business plan they should at least write down an informal roadmap to reference in the future.
One of the greatest pitfalls of any business is liquidity. While small businesses require much less capital to set up the cash flow for both large and small businesses are equally important.
Any company starved of cash is likely to be doomed. It is always better to arrange extra capital. Be prudent about your revenues and overestimate your expenses.
Record keeping is another critical factor of business success. Without adequate records, there is no proof of how much the business gained or lost over any given period. It is not only important to enter all expense and revenue transactions but to also include payroll details along with gratuity and other liabilities that come with hiring employees. Payroll accounting is also important for tax reasons.
Record keeping is an important means of tallying the resources being spent and received from each activity of the business. This makes it easier to identify the profit and loss of a small business.
Exposure to Target Clientele
Perhaps the most decisive aspect of business success is the identification and targeting of the correct market. Before a business is launched, management should determine the client demographics.
Let’s use a daycare center as an example of business success. The target market is working moms. The business needs to identify the mom’s habits and then brainstorm how to appeal and market to them. The business could figure out where these moms spend most of their time. The owners could ask whether in the real world or virtual is the right market to spend advertising dollars. If incorrect marketing mediums are used, there will be zero penetration and the business is likely to have a very slow growth rate.
In this era of rapidly advancing technology, maintaining an online presence is even more important than the installation of a telephone at the office. Most consumers seek information through online sources like Facebook, email, and a multitude of websites. A business that is not online is equal to being nonexistent in the eyes of most modern consumers.
Customer satisfaction is as important as the product itself. It is true that a disgruntled customer complains to more people than he would otherwise, had he been satisfied with the service. So with poor customer service, the business is not only cutting ties with existing clients, but also severing relations with potential clients. It’s like committing business suicide.
New companies should be particularly wary of this as social media has the ability to rapidly transfer news from one end of the world to another. Nothing beats exceptional customer service just ask Zappos.
Anthony Azevedo was at Deloitte and currently runs EZCFO for small business success. Their motto is: Today the smartest way to do the bookkeeping and payroll for your small business is not to do it.