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Wow's Rules of Business
March 10, 2011 at 6:07 PM
At Wow, we believe there are 5 crucial areas that every start-up business needs to focus on. However, these concepts don't just apply to the start-up phase...... the advice below applies to ANY stage of business! As your business grows and evolves, it’s easy to forget these basic lessons....here’s a reminder of what they are:
Lesson 1: Sales, sales, sales
Quite simply...without sales there are no accounts to do! Achieving sales and building upon this has to be your No.1 priority in the early days.
Although it’s important to understand your customers, don’t worry too much about market research. If you want to find out if the market has an appetite for your product or service, try to sell it and get some feedback – that will tell you everything you need to know!
One of the keys in the early days is to be direct - far too many start-up business waste time and money on over-complicated marketing in the early days when all they need to do is pick up the phone and talk to some potential clients!
Start with a clear and simple sales plan, which you can progress as your business grows. If you want to create a more detailed plan for your business, click here for Wow's guide.
Lesson 2: Targets are key
Set yourself and your business clear and measureable targets – this will provide focus, accountability and, more importantly, allow you to monitor your progress.
Break the targets down into quarterly, monthly, weekly (and even daily) targets. Some of the most successful small businesses Wow has worked with have been brilliant at setting simple, daily sales targets, e.g. book 1 sales meeting per day.
What are your sales targets?
Lesson 3: Don’t be scared of the numbers
Don’t hide behind meaningless stats, because ultimately it's the financial numbers that matter.....and they won’t lie! Set time aside on a regular basis to monitor your outgoings and cash flow and don’t be afraid to ask for help if there is something you don’t understand. Ask yourself these questions:
- What is your break-even point each month?
- Do you have a visual dashboard for the key measurements in your business?
- Do you know what profit you make on a monthly basis?
Carrying out a cash flow forecast can be extremely insightful. Which leads us onto the next point....
Lesson 4: Cash is king!
It's the oldest business saying in the book.... but it applies today more than ever before. Here are some top tips:
- Have a written credit control procedure.... and stick to it!
- Take action with bad debts – see if you can agree a payment plan.
- Ask for deposits before you start work.
- Don’t complete the work/deliver the goods until you’ve been paid (keep something back as leverage).
- Reduce the payment terms on your invoices to ‘7 days’ or ‘by return’
- Negotiate extended payment terms where you can (including with your landlord and HMRC).
- Build a relationship with your bank manager – help them understand your business so that if you need funding, they are more likely to give it to you.
- Pre-chase key invoices and build relationships with the purchase ledger departments.
- Monitor the credit-worthiness of your customers (and key suppliers) – www.creditsafe.com
- Consider credit insurance.
If you need funding for your business, check out Wow's guide to the funding options available - click here.
Lesson 5: Take action
Don’t let a fear of making mistakes stop you from taking action and making decisions. Learn from your mistakes (because you will make some, especially as a start-up business!). If you’re unsure of what will work in the market – try something and see! Your competitors and customers won’t sit around and wait for you. If there is a decision you've been putting off recently, act now!
Here's a great book that will help you get more of the important things done in your business: Eat That Frog by Brian Tracy
Don't forget.... these lessons don't just apply to start-up businesses. They apply to EVERY business!
Click here for more articles for Start-Ups
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