Back to the Basics

 Back to the Basics

Have you ever watched a really entertaining commercial, the kind that cost six figures to produce, and when the commercial ended, you forgot what the product was, only that it was a funny commercial? Some business people put such an effort into making their business promotions slick and professional that they forget who the intended audience was. In advertising, you have to consider the target market. Who is your prospective customer? What kind of magazines or papers does he/she read? The aim is not to get an immediate order but to build name recognition and a reputation for your company.

Do not waste advertising dollars, advertise smart. Remember Jim Mackingvale, owner of Gallery Furniture. People laughed at his first commercials, but he knew the message he wanted convey to his targeted market – sticking to that point made him a wealthy man.

Minorities now own nearly 15 percent of American businesses and surprising, Minorities in Business, 2001, issued by the Small Business Administration stated that women were full or part owners of 9 million businesses and the primary owners in 5.4 million.

Most entrepreneurs never expect to fail, but thousands closed their doors each year and the rate among blacks is extremely high. What can be done about this? Let’s review three contributing causes of failure.

The No. 1 factor is lack of planning and a lack of focus. Learn from the mistakes of others. Plan for success. Don’t make assumptions about what you want to sell when the customer is not prepared to buy the product or service at your price. Focus on the customer; they are your first source to potential problems. Develop and write a business plan, but update it regularly and follow it. A well-written business plan will focus your efforts and resources on the business in a smart way. It will identify potential pitfalls that stand in the way of success. Like a road map, a good plan will identify where you are, where you wish to go and the best routes to travel.The SBA has a program called The Business Plan – Road Map to Success – a tutorial and self-paced activity that can be download or viewed as a text version. Go to www.sbaonline.sba.gov/starting/businessplan.html The No. 2 most common reason that small businesses fail is access to capital, most are under-financed. Most banks are reluctant to loan money to businesses that are under-capitalized. Determine your cash flow needs in advance. Working capital problems and borrowing after the fact is much more difficult. Don’t leave all of the financial decisions to an accountant. Lack of interest in the “accounting numbers’ is one of the single biggest causes of business failure.The No. 3 failure factor is lack of information. New business owners do not generate adequate information for good decision-making and are operating blindly to the success of their business. Keep track of revenues, expenses, receivables, inventory, and how each relates to each other. Many entrepreneurs underestimate the tasks of managing a small business.The Small Business Association (SBA) 8(a) Minority Enterprise Development Program (MED), assist in the development of traditionally disadvantaged individuals and is the federal government’s largest procurement program. It has two primary components, Business Development and Management and Technical Assistance.

If you need advice about your business, please go to http://www.askrecy.com

 

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