The fundamentals of running a successful business are pretty simple. You need to know how to advertise, create value for your customers, and keep costs low. But if you’re just starting out, it can be hard to know where to begin. Do you need a business plan? How do you create value for customers? What should your target market niche be? I’ll walk through exactly what each of these steps entails in this post so that when it comes time for you to start your own small business, everything will be crystal clear!
Learn the fundamentals of business.
To start, you need to learn the basics. You need to know how to read and interpret a profit and loss statement (P&L), balance sheet and cash flow statement.
The P&L tells you how much money your business has made or lost over time. The balance sheet shows the company’s assets, liabilities and owner’s equity at any given point in time–and it’s useful for seeing how well they’re doing financially overall. Finally, the cash flow statement shows where all that money came from and went during a particular period of time; this can help you see if there are any problems with cash flow moving through your business that might prevent growth later on down the road.
ADVERTISE YOUR BUSINESS.
Advertising is a key part of any business, and it’s no different for small businesses.
You can advertise on social media, in print or online. You might think that social media platforms like Facebook and Twitter are the best places to advertise because they’re free. However, it’s not just about cost–it’s also about reach: the number of people who see your ad campaign in relation to its cost (or investment). As an example, if you make $5 per sale but only sell one product per day over the course of five weeks at $20 each time then it would take you 20 days before breaking even! In comparison, if someone sees one ad on Google search engine results page (SERP) every day over those same five weeks then their return would be much greater because there are more opportunities for them to click through than simply seeing another person’s post or tweet from across their feed.”
Create a business plan.
A business plan is a written document that outlines your business idea, its goals and objectives, the market it will serve, the competition it faces and how you plan to achieve success. It should also include information about your financial resources and how much money or other assets you have available for investment in the project.
A good business plan can help convince lenders or investors that they’ll make money by lending their capital to your venture. A bad one won’t get even close–and could cost you dearly when trying to raise funds from someone else (like a bank). So whether you’re looking for an investor or just want more information about what goes into creating an effective document like this one before getting started, this section will teach you everything there is know about writing great plans!
Know your target customer/market niche.
Knowing your target customer/market niche is key to understanding what your business needs to do, and how you’re going to reach them.
There are many ways of finding out who your customers are:
- Look at the demographics of people in the area where you want to start a business. What groups tend not to have access? How can you provide something that will benefit them?
- Ask friends or family members who they would recommend as good customers for your type of service/product, then talk with those people directly about what they need from someone like yourself (and see if there are any other potential customers around them).
Create value for your customers and grow your customer base.
How do you create value for your customers? The first step is to define your target customers and market niche. You may have a good idea of who your ideal customer is, but if you’re not sure, try doing some research. Look at competitor websites or talk to people who have bought from them in the past. How do these businesses position themselves against others in the same industry? What makes them unique?
How can you help these people solve their problems better than anyone else out there? Once you know who they are and what they need from your business, focus on creating a value proposition that addresses those needs while also making it clear why they should choose yours over anyone else’s (including competitors). For example: “We offer high-quality products at affordable prices” or “Our customer service team is always available via phone call or email.”
Once this is done, think about how best to attract new customers so that they’ll be interested in buying from you once they hear about what we do!
Keep costs low and make sure you are making a profit each month.
The first step to running a profitable small business is knowing your costs. You want to know how much money you’re spending in rent, utilities, labor and other expenses each month. This will help determine whether or not there’s enough coming in from sales to cover those costs and make a profit at the end of the month.
If this sounds like too much work to figure out on your own–and believe me it can be–there are some great tools out there for helping small businesses manage their finances more easily:
- Quickbooks Self-Employed allows freelancers or solopreneurs (or anyone else who doesn’t have time for complicated accounting processes) track their income and expenses as they happen so that they can stay on top of their finances without having to worry about confusing spreadsheets or complicated software packages that take forever just get set up properly before they even start using them!
Plan ahead for growth and expansion opportunities.
The best way to plan for growth is by doing your research. You need to know what the market looks like and how much opportunity there is in it, as well as how much demand there will be for your product or service. If you’re not sure what kind of growth opportunities are available, consult with an expert who can help guide you through this process.
Once you have a good idea of where things stand with regard to both the current size of your business and its potential for expansion, make sure that all aspects of running a profitable enterprise are in order before taking any action. This includes making sure that any equipment or supplies necessary for running the company are available–or can easily be obtained if needed–and hiring staff members who are capable of handling increased workloads (if necessary).
The basics of running a small business are pretty simple, but you need to know them before you start!
The basics of running a small business are pretty simple, but you need to know them before you start!
- Know your customers and what they want. The most important thing is that you understand why people would buy from your company instead of someone else’s. What makes the products or services that you provide better than the competition? If someone were looking at two different companies selling the same thing, which one would they choose? Why? Knowing this will help with branding and marketing later on down the road as well as improving customer service right now.
- Understand how much money is coming in vs going out (aka profit margins). It’s impossible for any business owner not knowing where their profits come from; however some businesses may have more complex accounting systems than others depending on industry type or size of operation so if possible ask other entrepreneurs who have been successful before about their experiences with keeping track throughout time periods like monthly statements sent out by banks/credit card companies etcetera.”
Conclusion
Now that you know the basics of running a small business, it’s time to get started. Don’t let this list overwhelm you! Each section is just one piece of the puzzle and there are many other things that will come up along the way (like how much money do I need?). But if we could all follow these steps, then I believe we could all be successful entrepreneurs someday!
