Do you have that entrepreneurial spirit? I definitely do, and hopefully you can see it within my blog. But even a true entrepreneur can have difficulty creating and maintaining a small business. You no longer have a slew of employees, or a management team to fall back on. All of the aspects to the survival of your business now relies upon you. Who is going to sell your product? How are you going to market your business? Will you have a need to manage inventory? If so, how will that be done? These are just a few issues that will need to be addressed when starting up a new business. I’m going to give you my thoughts on the five most vital aspects to the success of any small business.
Passion
I love blogging about personal finance, and managing the advertising needs for other blogs. It’s fun and challenging, and best of all, it makes money! Many people want to start up a small business, but there tends to be a high failure rate for new businesses because people fail to invest in something they have a true passion for. Everyone wants to start up a new McDonalds, or Subway franchise, simply because they are so well known. Do you really want to operate a fast food restaurant your entire life? Maybe you do, and that is perfectly fine, but make sure you seriously evaluate the nature of the business before you invest significant time and money within it.
Bookkeeping/Accounting
Too many people fail to realize the importance of simple bookkeeping services. I performed this function for a small real estate company while in college, and it helped to prepare me for the corporate finance world. Bookkeeping is important to understanding the profitability of the business, ensuring payments and collection, and keeping your invoices paid. After all, if the money isn’t coming in and going out properly, your business won’t stand a chance!
Inventory Management
Understandably there are some businesses that sell intangible products or services. As such, inventory isn’t the issue it can be with a business that sells a physical product. However, if you find yourself managing inventory, make sure you do it wisely. This can be on the of the highest costs to a new business. Products needs to be carried (or stored) until they time they are sold, which involves storage and management costs. Not to mention the risk of inventory that may never sell.
Networking
Networking is a term often thrown around, and at times seems almost dated. However, the old adage rings true, it’s not about what you know as much as who you know. Not to toot my own horn, but I think I do fairly well as a personal finance blogger. Though I know that if it wasn’t for my interaction wth a network of personal finance bloggers I never would’ve survived this long. It helps to network and collaborate with as many people in your field as possible. They provide free advice, new business, and sometimes a helping hand when needed.
Business Plan
A business plan is the centerpiece of a business. Without a plan, you are simply navigating without a compass. The business plan is what determines the necessary funding, sales plan, breakeven point, and the overall path to profitability. In the corporate finance world we spend months preparing an annual business plan for the coming year, and then spend the rest of that year analyzing variations to it. Any successful business will create a detailed plan, and use it as their central point of reference as they navigate their way to profitability.
