You can find hundreds, if not thousands, of articles written by highly skilled and talented people who tell you exactly what it takes to get your business up and running. Although helpful, most of them are more or less the same. Starting a company is no easy feat and no matter how many articles you read or how many people you talk to, it’ll be a fight that you personally have to cater to.
A business is like a baby, you have to support it the right way, you need certain tools and abilities to help it develop, and most importantly, you’ll need to manage your money in a way to continuously support it. Here are the three most important things to consider that’ll make or break your SME, and what it takes to succeed in each.
Understand Cash Flow
Whether we like it or not, money is one of the most important things in the world. We use it to fulfill our basic needs, to buy whatever we please, and overall to keep the world moving. To many of us, our business IS our world, so it is important to know the basics of cash flow to keep our business running.
Understanding the concept of cash flow is important for your SME to continue functioning. Cash flow problems are one of the biggest reasons small companies run out of business, and recognizing errors early on can prevent that from happening to your business. Cash flow is the amount of money coming in and out of a business. Without adequate cash, it becomes hard to pay wages, suppliers, and rent so it’s essential for every business owner to know how to properly manage it.
When more money is coming into your business than going out of it, you would be in the better position to pay expenses and bills as you are having “positive cash flow” at hand. It is the same with the opposite. Many starting businesses borrow money from banks or lenders to cover overdrafts. If your money is going more out than in, you can apply for loans that can assist in covering cash flow shortages and expenses.
It’s especially important to have a working capital when your business is new as the starting expenses are high and you may not have as much revenue or sales at the start. Loans aid in covering the basics as you get your SME started on the route to a fresh new positive cash flow situation. The best way to manage your cash flow is through a cash flow report so you can see your changes in cash and what business activities affect it negatively and positively.
Pick a Great Support Team
Your company is only as good as the people who are in it. You most likely want your SME to be successful (otherwise you wouldn’t be reading this article), so it’s vital that you have a great support team. As the leader of your business, we naturally want to be the best and “smartest”, but hiring employees with that mindset keeps your business from standing out.
It’s better to have someone who always dedicates time to continuously improve and grow with whatever they’re doing, over someone who chooses to stay within their comfort zone and area of expertise. Of course, it’s human nature to continue with what you’re comfortable with (we are all guilty of doing that), but when starting a new business or when wanting to expand your SME, people who have the drive to go the extra mile should be favored.
Anybody can develop skills and learn new abilities if they’re committed, but you cannot forget that you’re hiring the person, not just their skills. To have a strong support team, it’s crucial that your morals, values, and beliefs coincide and mesh well with each other. It’s always good to consider in the point of view of outside customers; “if this business hired this person, do I really want to support the business?”. Keep in mind, you hire for the skills but you will be working with the person, so try and choose those who will help you grow your business with you.
Understand Your Market
Understanding your market is one of the key things to consider that can make or break your SME. You can come up with the most creative, unique and innovative product ever, but your business won’t go anywhere if there is no market for it. Identify a target market. Who are you trying to sell to and what exactly would they be looking for? Before even creating your service or product, it’s important to research and learn about the exact needs of the public and what kinds of thing your business can do to fulfill them. There are many different ways to find out what customers are looking for such as surveys, focus groups, interviews, and observations. It’s a vigorous process but essential if you want to succeed.
Knowing your market is one thing, but actually marketing towards them is a whole other field. Once you discover who you’re reaching for, it’s time to learn how you’ll reach them. Creating a specific message and vision for your target market allows them to have a preview of what you’re trying to do. Instead of having a vague general message, addressing how certain needs will be met allows the audience to envision what it’ll do for them in their personal situation.
It further allows your business to keep developing your market down the road by focusing on how to cater to the specific demographics within your target market. For example, if you’re targeting just men, then consider how to advertise to the different age ranges to make it more personalized for your customers. Marketing your business is one of the most crucial things to consider when starting your SME; who are you catering to, and why are you catering to them specifically.
Building a business from scratch is one of the toughest challenges you can take on, and although it involves a ton of work, the end result can be beyond your wildest dreams. To get on the path to success, though, you must always consider three things; understand how to manage your cash flow, pick a talented support team, and know your market well. In the end, your business is yours alone and it’s up to you to make the right decisions for your SME, but remember, our company and blog is here to support you on your venture to the wonderful world of being an entrepreneur.