Surviving your first year in business

So now that you’ve started up your small business, how do you survive the first year?  Unfortunately, as many as 70% of businesses do not survive that challenging first year. “In most cases, this is due to some basic mistakes made by their owners.  A lack of proper finance management, clear vision and worked out profitable business ideas are amongst the most common ones.”  In essence, the chance of your business surviving its first year is in your hands alone.

Step one: Stick to your original goals.  Your goals allow you to create a roadmap for your business’s success.  It might be difficult at times to not stray from your initial concept as you are flooded with new ideas daily.  But stay the course you were originally on and success will follow.

Next, measure your progress.  “Make a habit of regularly checking where you are against your goals, sales targets and short term plans.”

Expect the unexpected.  "There are a lot of start-up costs-entrance fees to trade shows, gas and food when you spend your day meeting with people, having your website built and hosted, company vehicle, mailings, phone costs, business cards, brochures-that I don't think people even think about when they start a business."

Do your homework.  A lot of businesses fail because they don’t do the required research and development required to succeed.  As I’ve said before, know your competition.  Ask the pertinent questions as to what is already out there in the marketplace.  Where is there a lack of need?  What are consumers clamoring for that there not already getting?  And if an idea is already out there, how can you expand on it and make it better and market it to a target audience whose needs aren’t being met?

Track your finances.  Sometimes they can be misleading.  A lot of money may be coming in yet you still might make a loss.  Knowing if your company will make a profit is likely the most important piece of information you need to know during your first year of business.

Secure funding.  You can fund out of your own pocket, ask family members for loans or try your luck at a bank.  "Start small enough so that the risks aren't so large, you can't face them.  Why not start part time on a small scale, go through two or three iterations by yourself to see if it really does make a 20 percent return on your effort?  If it doesn't, you haven't lost too much.  It's a lot better than borrowing $25,000 from somebody and it not working."

Make sure you have enough savings put away to take the risk of starting your own business especially if you don’t want to seek a loan.  Most experts say you should have 8 months to a year’s worth of savings in the bank before venturing out on your own.

Seek advice.  One of the important ways to ensure that your business is running smoothly from the start is by not doing it alone.  Network with the right people; confide your ideas in close friends and family.  You can also use books, blogs, forums, mentoring programs or professional courses too.

Surround yourself with successful people.  Hang around those who have made it big in business or at least understand what you are going through as they might have recently started up a small business of their own.  This way you are constantly learning which leads to growing and bettering your idea.  They can point you in the right direction and give you tips on how to succeed.

Keep an eye open for new opportunities.  You never know where the next opportunity will come from in business.  “Look out for signs that someone might be looking for what you are selling, or is just looking to network. You never know where this relationship will take you.”

Prepare to adapt to change.  The business environment is constantly growing and evolving.  In order to survive you will have to adapt to new trends, new technologies affecting your business social and economic changes and many other things.  Learn to change and accept new things when they come.

Lastly, remember to save not spend.  Think twice before every purchase.  “It is quite tempting to get the latest equipment, software or state of the art offices.  However, in many cases you don’t need all this.  You can use the equipment you have at the moment.  You can use open source alternatives to a popular software and work from home or a co-working space, if possible.  Save money and bootstrap your business.  You will need every penny before your business turns really good profit.”

Here are some articles you might want to check out about surviving that challenging first year in business.

“5 Tips for surviving your startup’s first year”: http://www.entrepreneur.com/blog/223400

“Member to member – surviving your first year in business”: http://metro-edge.org/2011/08/member-to-member-tips-from-fellow-young-professionals/

“What to expect in the first year of business”; http://www.gaebler.com/Tips-on-Surviving-Your-First-Year-in-Business.htm

Until next time…

Finding your BIG idea in business

I’ve talked a lot about ideas and steps to take in starting a small business but maybe today it’s time to get back to basics (especially for those of you just joining me) by talking about how you might, in fact, come up with your business idea in the first place.  

I’ve heard it before: If you love what you do, the money will follow.  That’s definitely true to a certain extent but remember even though, it’s important to pick an idea that you enjoy, you also have to find something that is marketable and will reach a customer base.  The idea, in essence, should not only attract a consumer but keep that consumer interested so they will continue to use your services.

First off, make sure you understand the product you are selling.  Do your research and development before you make your idea available to the broader public.  You don’t just want to throw a concept out there without being prepared.

As you start putting your ideas together, get feedback from others around you.  Network with the right people and bounce ideas off and them and see what sticks.  Don’t be too concerned that you are, in fact, giving away ideas.  Only someone that is really passionate about an idea will run with it.  But if you’re nervous about this process, only talk to close friends or family – people that, in essence, you really trust.  If you've already spent time building up skills and contacts in a certain industry, it's natural to use expertise you've already developed in your own business.

“For many would-be entrepreneurs, the first step is the greatest hurdle: if you don't find coming up with new business ideas a natural process, you'll need to train yourself to think laterally.”  Remember, coming up with the idea for your business is the fun part!  You aren’t at the stage yet where you have to get into logistics, costs, funding, etc.

Think about the future.  Where will the market be in 2-5 years?  Will your product still be viable down the road?  Will there still be a need for it?  

Don’t forget, as I’ve mentioned before, in other blogs: Check out the competition.  Why is their idea working?  How are they reaching a large audience?  How can you build off their ideas or processes to make your idea even better?  Don’t be afraid to look at other peoples’ ideas for creative inspiration.  You’re not a copycat if you do so; you’re merely doing your much needed (and much helpful) homework.

It’s funny but true: ideas tend to occur in the least convenient places so keep a pen and paper (or electronic tablet – as it is the modern age) with you at all times.  Whether or not it’s true, I’ve heard that your brain tends to be at its most creative just before you fall asleep at night and right after you wake up in the morning, so keep something handy by the nightstand.  This might sound like a weird idea, but I promise you, it’s a good plan!

Try looking for a solution to a problem.  Many ideas can be developed this way.  What is and isn’t working in the broader marketplace?  What are consumers clamoring for?  Think about how you can meet needs that aren’t in fact being met at the current moment.

If you’re still having difficulty coming up with a great idea, take a break.  Go for a walk; clear your head.  You never know what inspiration might come just around the corner or from something you witness beyond the brainstorming “table” as it were.

While creativity and optimism are great, make sure you know your limits.  If your trained as a banker but want to come up with an idea that arises from a passion or hobby, make sure you know it well and really understand it.  For example, just because you like playing video games, doesn’t mean you’re prepared to create the next X-Box.

Lastly, make sure you business idea is something you can afford and something that will be profitable in the long run.  You don’t want to waste your time on an idea that won’t reap rewards.

As I move forward in this series, I will be talking a little about how to expand on your idea or in essence, create your next big idea.  After all, you have to keep growing your ideas if you want to stay completive in the small business landscape.

Here are some articles you might want to reference as you look for that “big” idea:

“How to come up with a profitable business idea”: http://smallbusiness.foxbusiness.com/starting-a-business/2011/06/07/how-to-come-up-with-profitable-business-idea/

“How to come up with a business idea’: http://www.wikihow.com/Come-Up-With-a-Business-Idea

“How to come up with better business ideas”: http://management.fortune.cnn.com/2011/05/04/how-to-come-up-with-better-business-ideas/

Until next time…

Finding a niche in business

When starting up a new venture, you must ask yourself: Do I have a viable niche and how do I go about securing one?  The most common form of success for small businesses is establishing themselves as a niche market.  No retailer can be all things to all people.  “There are always going to be consumers out there whose needs for a particular product are going unmet – leaving room for the small business to succeed by meeting those needs.”

I’ve read two opposing theories to discovering whether you have a viable niche.  One is that you want to be the only one out there selling your product so make it unique.  Another is that by finding competition, you’ll know your niche is viable – meaning that other people have been there before and have been successful at it.  I recently read an article where the author made this exact point by saying: “If the market is saturated with fad diets, you have more of a chance of writing a bestseller with a fad diet, than with a rigorous lifelong diet.  If TV is swamped with reality shows, then you’re better off making yet another – yes, another – reality show.”  Both ideas make a good point but I’m still not 100% sold on which one I think is more effective in the long run.

These two opposing views aside, many experts tend to lean towards recommending that you look for unmet needs as the best way to find a viable niche.  That said, it’s never a bad idea to build on what’s already out there.  Look at your competition and see if you can do it better; if you can offer something that they’re not offering.  Where are the holes in their business model?  What are they not offering consumers that you potentially could?  It’s OK to look at someone else’s idea and make it better; to grow and expand your own business model by tapping into what’s already out in the marketplace.

“You can create all kinds of wonderful and wonky products and/or services but if no one wants what you’ve produced, what’s the point?”  Therefore, you have to do your market research.  If you want to know if there is a market out there for a particular product, the best way to find out is to ask.  Don’t just come up with a random idea and throw up a website and see if people bite.  Do your homework first.

Marketing is perhaps more important for niche market businesses than for any other kind, because the niche market business is by definition, unknown and succeeds or fails on making the connection with exactly the right kind of customer/client.  If you open a coffee shop, people know what you’re selling but if your idea is more off the beaten path, then you need to vocalize it more.

Many experts say that one of the best ways to find a niche market is by starting with your passions and interests.  “Your efforts to find the right niche should begin with an assessment of what kind of product or service you could get excited about providing, what market you would be enthusiastic about serving, and what skills and aptitudes you have that could make it all work.”

Sometimes, filling the niche you want to occupy is a matter of finding someone else who’s already in that business but dropping out.  If you like how that company has defined and filled the niche before you, buying an existing business is one way to land in the space you want.  Then think as you did as a consumer about what the holes were in the business and what product or service wasn’t out there when you were merely a customer – fill those holes and you might just find your viable niche!

Lastly, don’t be afraid to evolve.  Don’t hesitate to tweak or even make significant changes to any facet of your business.  If it adds value, it’s a good thing.  In order for a business to grow, it needs to evolve.  Monitor feedback from customers; they can be critical, but this is exactly what you want. 

As I wrap up, here’s some food for thought: “To keep a business strong and competitive, you need to evaluate the lifetime value of your target market.  That means taking a long-term approach to marketing by assessing the lifetime value of the customers.”  Nurturing consumer loyalty is the best way to capitalize on this.  When you have a niche, you might fall prey to becoming too specific in the audience you are targeting and might lose your customer base over time.

Here are some articles to check out about finding your niche in business:

“How to know if you have a viable niche”: http://www.psychotactics.com/blog/viable-niche/

“Seek an edge by finding your niche”: http://entrepreneurs.about.com/od/becominganentrepreneur/a/findingniche.htm

“Find your niche”: http://www.business-opportunities.biz/2009/01/28/find-your-niche/

Until next time…

The benefits of using business coaching

It has been reported that in a study of 101 small businesses in the US, almost 58% of them use business coaches.  So why use one and what are some of the goals that such service can help you achieve?

At first glance, it might seems that only a struggling business would want the services of a professional business coach but a business coach can do a lot even for successful businesses.  It is also a good stepping stone for individuals looking to start their own companies.  “Hiring a business coach can be a step towards identifying and achieving your business goals.”  A business coach can help you expand your business and make it more profitable.

“Think of a business coach as a mentor-for-hire they're not "consultants" in the traditional sense, because they have no interest in firing employees, cutting costs and improving your bottom line.” A business coach is an advisor who'll work with you to identify your strengths and weaknesses, help you set achievable goals and teach you how to track your progress, and motivate you to make the very best of your business based on your own needs.

Athletes often hire coaches to help them improve their skills even if they already have a solid foundation on which to build those skills.  Business coaches can work with you behind the scenes to help you become a stronger more focused business manager.  They can help you find solutions that will help you fulfill your potential.  “They act as a friend and advisor, looking at your business with an unbiased eye and guiding you in everything from time management to employee conflict resolution.”

You may be surprised to discover that business coaches can be surprisingly affordable, particularly when weighed against the financial benefits of their expert advice.  For as little as a few hundred dollars per month, a professional business coach can help you to increase your business's productivity, profitability, customer service satisfaction, employee morale and management turnover.  “With many coaches operating via e-mail and fax, you may not even have to be in the same city as your coach but they're just a phone call away with advice when you need it.”

“A business coach can be your secret weapon in expanding your business or making your career flourish, whether you need advice on website design, create marketing strategies or help in learning the skills to set effective goals.” Consider hiring a business coach as a positive step towards reaching your full business potential.  As a behind-the-scenes advisor, your business coach can help you earn more money, operate your business more smoothly, or become a more effective leader.

Additionally, coaching can accelerate the development of high performing mid-level managers. “In the course of an organization’s life there is a natural ebb and flow of old and new talent in and out of the organization and its leadership ranks.” To ensure the continued success of the organization, succession coaching ensures that sufficient attention is given to future leadership development.

Coaching also enables leadership team development.  Think about combining individual and team coaching for the senior leadership team.  “The combined approach allows senior executives to identify their own growth goals, but also to implement a process which supports their responsibility for developing their subordinate managers.”

Business coaching can also lead to conflict resolution between managers of a business that might not see eye-to-eye and help them develop mutual understanding and trust.  “It makes sense that intelligent people will disagree from time to time about how certain missions will be accomplished.”  However, when the conflict threatens the collaborative efforts of a team, the situation must be addressed before ongoing resentments destroy the team.  Executive coaching can be structured to ameliorate the differences that create conflict between people who need to work together and strengthen the team for continued success.

Here are some business coaching services in NYC that you might want to check out.

“Executive Coaching Group”: http://executivecoachgroup.com/1on1coaching.html?gclid=CPncvNyY868CFUZN4Aod_jJvYA

“BPA Business Coaching”: http://www.bpacoaching.com/newyorkcity-executive-coach?gclid=CODKvvWY868CFUSK4AodmSkhZQ

“Manhattan Business Coaching”: http://www.businesspsychologysolutions.com/

Until next time…