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Thread: The first steps towards business.

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    The first steps towards business.

    Opening a small business one must consider the following: Product, services and your expertise on the products or services. Fact is that knowledge of your products is invaluable. If you can answer the difficult questions and make sound recommendations then your customer will find confidence in not only the product but in your business and this allows for repeat business.
    Secondly one must evaluate the availability of the product or service you are selling and what the expectation are for the product in question. This will allow you to plan for future supply and demand scenarios.

    However with all of this done there is one more important step towards success. Who is your target customer? Will it be commercial, private or industrial? Secondly you need to work out how competitive you have to be in your selected target. These factors will altimetry translates to your profit margin and business sustainability. In short it will make or break your business.

    Base your planning on proper research. Never say “everyone would like to have this” You may be in for a shock. Also take into consideration the life expectancy of the product or service in question. Is it trend base or is the demand constant? These questions are important because it will ultimately translate to the amount of stock you will need to keep on sight and that will translate to expenses.

    The key to any success is planning. Do not only plan on profit but also plan on closure and work out maximum loss. It is always good to have a closure plan because it might save you financially. Also re-evaluation on growth versus demand. Never outgrow your demand because this can lead to a costly overhead. Demand dynamics is almost always economically grounded and if monitored you can make informed decisions on stock and employment or even plan for advance closure.

    Lastly always keep your ear to the ground. Customer feedback is a strong indicator for future demand and profit and more important it will always show you in advance what your customers are lightly to do thus you can plan for change and even closure.

    I cannot stress this enough! Always plan for closure... A good closure plan shows if you really are making money or not. Case and Point: If your closure plan is in the minus you know that you need to up sales. If your closure plan shows that you can break even you have what is known as acceptable risk. Lastly if your closure plan shows profit after all deductions you know you are doing better than average.

    A good closure plan must be dynamic and indicate all the financial facts thus it will always show you the true health of your business.

    Hope this helps

  2. Thanks given for this post:

    Dave A (06-Apr-09)

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