My business coaching Story. Part 1 of 3
When I first decided to go into my own business someone said to me, tongue in cheek, that the best way to make a small fortune is to start with a large one. Many a true word is said in jest, but none are truer, than when applied to business. Unfortunately, and it is a sad fact of life, that all too often people go into business investing every last cent they own plus borrowed additional funds in what they hope will be a successful business, and then they fail. There are many reasons why people wish to go into their own business, but failure, is not one of them. We go into business to succeed, to live our dreams, and to build a better future for our families and ourselves. We may be driven by a vision, or we may simply wish to make money: lots of it we hope. The business of going into business is to do business. And no more so than when we go into a retail business. But all too often people who decide to go into their own business do so without proper preparation and training, lacking some of the basic tools that are required to succeed, and not having a real understanding of what it means to run and manage a retail business. Even a drain clearing business should follow this. A basic understanding of the dynamics involved in owning a retail business can make the difference between success and failure; between seeing one’s dreams become a reality, or, collapse around their ears. A study by Prof. Allan Williams showed that about 32% of businesses fail in the first year, 16.5% in the second year, 13% in the third year and 7% in the fourth year, and 5% in the fifth year so that after 5 years only 25% are still in business. Often businesses fail because they are either: • undercapitalised • unprepared • or, in business for the wrong reasons But the biggest cause is the lack of proper planning. That means that many people have no clear idea as to where they are going, and when they get there, if they get there in the first place, they do not know how to proceed. All too often they are flying by the seat of their pants. Not a good way to start a business, or, to run one. A dream, an ambition, or a desire to achieve some form of recognition are not substitutes to proper planning and hard work. Let me hasten and say that many retail businesses do survive, grow and thrive, sometimes in a most competitive environment. And they are clear proof that success is not beyond anyone’s reach. The essence of a good retail business is based on the following elements: • Innovation – having a clear point of difference from one’s competitors • A proper business plan • A realistic budget • Sufficient funding, or known sources available, from which additional funds can be obtained • Trained staff • Required stock levels • Proper stock management and stock control systems • And a clear marketing strategy The lifeblood of any business is having a positive cash flow. Just as the human body cannot function and survive without a sufficient and healthy blood supply, so it is with business. It cannot survive for long without a positive cash flow, let alone grow and flourish. There are two generators required to achieving a positive cash flow. These are STOCK and SALES and one can’t do without the other. You cannot achieve the required level of sales if you do not have the right level of stock in the first place. Not only that, but it must be stock of the right kind. In other words, proper stock management and control are essential to make it all happen. Make sure site is sep up correctly too.