- 1). Step 1) The key to growing a small business from start up, through the mom-and-pop phase, to a legitimate business takes careful planning and preparation and a well thought-out BUSINESS PLAN AND BUSINESS BUDGET. In order to be a successful entrepreneur you need to be a good, reason-based PLANNER. How much money are you going to spend on marketing this month to achieve the financial objective? What are your business expenses going to be this month? These are the fundamental questions you need to ask yourself when doing your monthly and annual business budget (Your marketing budget should be a subcategory of your business budget).
- 2). Step 2) Are the results of your marketing objective reasonable and logic-based or wishful thinking? It's unreasonable to believe that your start up small business will get $7,000 in new business from putting 100 flyers around in a neighborhood. Are there any business expenses that you can cut back on to increase your bottom line? Can you foresee any increases in your business budget for the upcoming months? It's better to be conservative even pessimistic about the results of your marketing objective than overly hopeful; it's of paramount importance to have KEEN FORESIGHT when planning your business budget for upcoming months.
- 3). Step 3) Allocate a certain amount of revenue to the NORMAL CATEGORIES of running and operating a small business including liability insurance (all legitimate small businesses must have liability insurance), business phone, office supplies, computer, fax, printer, Employee/Independent Contractor pay, etc. These categories are essential in growing your small business, and as your business grows, these business expenses will grow as well.
- 4). Step 4) Set aside a certain amount of revenue as your SALARY. Do not simply take the entire amount that is left over at the end of the month as your salary--save a certain percentage of that for a rainy day. This is called your RETAINED EARNINGS and is a god-send during difficult economic times like we have now.
- 5). Step 5) STICK TO YOUR BUSINESS BUDGET. It is really dangerous in the business world to make a huge business expense--or a huge marketing expense--without running the numbers just because it "feels right" (believe me, I've been there, and it hurt). Intuition when making business decisions is important, I agree, but you need to be able to differentiate your intuition from your emotion. Intuition good, emotion bad when making business decisions is good rule of thumb.
- 6). Step 6) Have someone DOUBLECHECK YOUR BUSINESS BUDGET AND BUSINESS PLAN. I know you've looked at it multiple times and honed it, but having someone else look at it as well will ensure its quality. Have the other person a) check the financial numbers, and b) check the business strategy to see if it's sensible. This is just old-fashioned common sense.
- 7). Step 7) Businesses come and businesses go the majority of the time a) from lack of sales and b)from poor business management. One of the fundamentals of business management is developing a good business plan and a sold business budget. I hope this article has articulated the importance of this business criteria. Good luck!
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