By: Jennifer Hice
on Thursday, July 21, 2011
Given today’s stormy political and economic climate, America’s small business owners often find themselves battling for survival amidst the country’s unrelenting winds of change. Each day, business owners and entrepreneurs alike are up against an ever-increasing number of challenges. While many are learning to master the process of riding the waves of economic uncertainty, others are struggling to stay afloat. What is it that separates those who sink from those who swim?
In its most basic form, a company’s business model is essentially the guide by which it conducts business in an effort to generate revenue. That said, continuously crafting a sustainable and successful plan is of the utmost importance for all owners and entrepreneurs. Whether you are striving to start a new business or sustain the growth of a current one, it is vitally important to remember that neither you, nor your business plan, are static. No matter how bulletproof your company’s business model may seem, it must always remain a “living” documents. Business plans should be malleable and able to accommodate change, as they will be constantly challenged by competitors, shifts in the economy, advances in technology and the like. The ability to adapt to unforeseen circumstances and adjust a business plan accordingly is the hallmark of success for any entrepreneur.
While adaptability is obviously an essential skill, it does not mean that owners should blindly implement change without proper evaluation. Consider the old carpenter’s motto…Measure Twice, Cut Once. Take great care when attempting to adjust your business model. Be sure to complete any necessary due diligence, such as market research, risk assessments, SWAT analysis and/or customer satisfaction surveys. Information is power, and arming yourself accordingly will further support the strength of your decisions, which will ultimately impact the future of your company’s operations, marketing strategies, sales processes and the like.
There are basic tools any budding entrepreneur or current business owner can use to ensure they are building the strongest foundation for success. Most businesses fail due to lack of money, lack of knowledge or lack of support. Planning and forethought become paramount when establishing a process by which your business can enjoy sustained growth. A proper game plan, or business model, includes defined information regarding your company’s vision, mission, values, operating budget, marketing practices, sales strategies and customer service techniques. For example, establishing a budget with projected revenues and expenses is critical. The more effectively your forecast these line items, the better your chance for success, especially when in the start-up phase. If you seriously underestimate projected revenue or planned expenses, then your business is already in jeopardy of failing. Other elements of your business plan, like marketing and staffing, also require routine evaluation, especially as both internal and external conditions change. Internal change, like a storefront relocation or the purchase of new point-of-sale equipment, as well as external change, such as the arrival of a new competitor or a shift in government taxation within your industry, can all be overcome if the right plan is in place. Once again, three little words have a big impact: Always. Be. Prepared. Free Credit Score!
In both business and in life, unexpected problems, road blocks and hurdles are bound to arise. The degree to which one can anticipate and best prepare for these moments is what separates those who sink from those who swim. Preparing your company’s survival kit is like ensuring there are life vests on your boat. Just as the captain of a ship will outfit his vessel with the proper safety equipment to protect his passengers in the event of a storm, so too would the owner of a business equip his company with the proper tools and strategies necessary to survive a sales slump. As an entrepreneur, it is important to understand your personal strengths and weaknesses, as well as to remain humble enough to know that you don’t know it all. Utilize every resource at your disposal. Solicit the advice of other business owners in your industry. Talk to your current customers and listen to their feedback. Reevaluate your marketing practices. Make sure you’re communicating the right message to the right target market for your product or service. Always strive to continue your education by attending college courses, industry seminars, webinars and the like.
Let’s not forget that part of the wisdom of capitalism is the right to fail. Hard work and initiative often pay off, but they are not guarantees. The market often determines who wins and who loses, or who sinks and who swims. No matter how good your idea, service or product, there are many potholes on the road to success that can easily impede or even doom your progress. This is exactly why it is vitally important to define and implement a strong and viable business plan. Once a plan is established, the periodic assessment of its elements and results will equip you to make the adjustments necessary to sustain growth and keep your business both productive and profitable.