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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
Earning on Your Dreams: How to Start a Successful Startup
Starting your own company is a dream of everyone who gets frustrated with taking orders, office politics, or just struggling while someone else gets rich. But there are some crucial factors you need to consider when making the jump to entrepreneurship. You must understand your own business vision, your customers, and especially the value of your product or service. Here are some suggestions to ensure you're on the right path.
Offer People What They Want
You could be in trouble from the very beginning if you're only trying to sell consumers what YOU like. Your own, original product or idea may not have the special appeal you were hoping for. In any case, a company built around a single product or service may not have staying power in today's innovative, tech-driven market place. For example, why reinvent the tennis shoe when you can focus on quality and marketing? When starting out, a small piece of a huge market may be more profitable than taking big risks.
Have the Funds Available
Don't assume that because you've started advertising your sales are going to take off. Establishing yourself in the marketplace takes a little time to earn name recognition and trust. Meanwhile, you'll need funding to keep supplies coming, bills and payroll covered, and much more. Before you invest every penny you have in a new company, see about securing money for your future. Fix your credit first and apply for a loan with a trusted bank. You should look for one that provides an app so you can quickly check on your financial resources from a smartphone whenever and wherever you need to.
Gain Positive Cash Flow
Your future success depends on achieving a positive cash flow as soon as possible. Meeting and sustaining profit margins are everything. For a service-oriented company, you might try asking potential clients to make an up-front deposit with the balance due on completion. In retail, you could request a deposit on big ticket items and set up a payment plan so you have at least some cash coming in regularly. This is often a selling point that increases value. Another tactic is to sell or bundle white-label generic items as part of your inventory. That will allow you to add the value of your brand to the selling price.
Keep Your Costs Low
Build profitability by finding ways to keep your own costs down. In fact, it should be a continual process. Keep track of how your vendors are performing and what kind of rates you're getting, so you can adjust your supply chain for maximum profitability. Lower expenses by buying recycled paper and boxes or used office furniture. Find ways to engineer efficiency into your processes by reducing physical travel, repeated handling, and communication delays. Give employees adequate tools and technology. Always be vigilant for wasteful practices and find ways to correct them.
Focus on Marketing
Gaining market visibility is a key to growing your company. Put some thought and effort into each marketing campaign. This means doing research to find out exactly who your target customers are, where they can be reached, and what formats they prefer, such as video or infographics. Never underestimate the power of social media as a very affordable way to reach out to consumers. Many entrepreneurs put off focused marketing until they have their brand ideas in place. You should be focused on building your customer base from day one, and determine branding as you go.
Failure within the first two years happens to 30 percent of startups. Don't assume you'll be around to realize long-term plans. Get your cash flowing now.
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