"Approximately one million new businesses are started every year in the United States. About 80% of all new businesses fail within five years."
What Makes a Business Successful?
Small business owners must wear several hats. Never stop investigating new ideas to improve all areas of your business. The astute manager will gather information and make the changes necessary to stay profitable in a competitive business world.
Business problems and their solutions are as varied as the many different businesses in business today. There are a few universal truths, however, when it comes to running any business.
If you've been in business for years or are just starting a new one, We can help you select the proper organizational structure and secure adequate financing. We will work with you and your banker, lawyer, insurance agent and other advisors to solve your business problems. We can assist you with loan applications, pricing, credit policies, cash flow needs, cost controls, and other issues dealing with management. We will gladly review your current operations and make suggestions to turn a bigger profit.
TIPS TO IMPROVE PROFITS
- Listen to your customers. You're not really selling products or services; youÕre selling customer satisfaction. Satisfied customers return to spend more money and are likely to refer new customers to your business.
- Provide quick and good customer service to your existing customers. It is estimated to cost ten times as much to acquire a new customer as it does to retain a current customer through good customer service.
- Train employees to operate your business. If your company runs well in your absence today, it will continue to operate properly in the event of your disability or death. If you are currently indispensable, start training people now. One of the most rewarding forms of retirement is to own your own company and to be absent as much as you like.
- The word ability spelled "A.B. I. L. ity" could stand for Accountant, Banker, Insurance Agent, and Lawyer. These professionals handle a variety of business problems every day. They make excellent sounding boards for proposed transactions.
- Be your own best business troubleshooter. Consider arranging a trip to visit a half dozen businesses just like yours, but outside your trade area. Discuss products or services, customer relations, vendors, physical plant, equipment, and financial statement information with these non-competing colleagues. Arrange a five to ten day trip. Take your financial statements, a copy of your floor plan, your camera, and a long list of questions. You'll be able to inform your staff of all you learned when you return. This trip is especially beneficial if you are not affiliated with a franchise operation.
- Operate from a budget. Last year's financial reports serve as an excellent guide to setting this year's budget. Since these reports are designed with the best information you have available at the onset, the variances from the budget figures may give you valuable information in preparing the next year's game plan.
- Research your market. Before you start a new business be sure the community can support it. Some areas aren't large enough to warrant certain specialty shops. A bicycle shop, for example, may take a population base of 50,000 people to make it profitable. A grocery store, on the other hand, can be profitable in a town of only a few thousand.
- Offer credit to your customers. Credit is necessary to attract some business and is profitable if properly managed. For example, a construction company finds it impractical to issue credit cards to its employees and inconvenient to use a check for every purchase. In exchange for the courtesy of an open account, such customers should be willing to pay immediately upon receipt of a billing statement.
- Business deals and special franchises which sound too good to be true usually are. Scott K. Perkins will gladly review any new purchase or business proposal before you buy or enter into any agreement.
- Have your attorney draft a well-written partnership agreement. Business partnerships are like a marriage, but seldom have the same courtship afforded most unions. It is important to draft a partnership agreement with any partner including family members.
- Don't incorporate your business without checking the long-range tax and non-tax considerations. There are many small corporations that would have been better served in some other legal form.
- Deposit payroll tax deposits before signing payroll checks. Some businesses receive penalties for late deposits. This may have you paying deposits earlier than required, but will eliminate the penalties.