Take Five Minutes

If you have ever thought of owning your own business or own one already, you probably would want to take five minutes of your time to read this. There are probably hundreds of reasons and ways a business can fail, but from my experience as a small business lender, these five are the most common. But don't take my word for it, Dun & Bradstreet, the Small Business Administration, and many small business lenders would say the same.

1.) The Wrong Product
There is nothing worse than selling a product that nobody wants and nobody has heard of. First and foremost, you must identify that there is a need for your product. Do you know the product you are selling? Do you have any experience selling this product. Or it could be you are selling the right product at the wrong location. Or if people do not know about your product, then you need to educate people about the benefits of your product. So, find the right product.

2.) Lack of Planning
So, you picked a product that people need. Now sell it to them. Selling is easier said than done. Contrary to popular belief, the selling process does not start at the front of the store, but instead in paper. That's right, you need to have a business plan. Your business plan must be clearly defined and articulate the features and benefits of your product, who your costumers are, their motives for buying your product, what is unique about your product, the price, etc... I rather you make mistakes in paper than in dollars.

3.) Lack of Capital
Now that you have your plan in writing, let's make it happen! But before you can buy the raw materials for the product you are selling , you must have capital. Capital is essentially assets that can be converted into assets with higher values. Capital can come in forms of cash, furniture, equipment, vehicles, building, labor, or land. To obtain these capital, you first want to use your own assets, then borrow, and then the last resort acquire investors. Your own assets is the cheapest form of capital, so start with that. Make sure you have sufficient capital to sustain your business for at least to the point that your company is profitable.

4.) Lack of Marketing
There is a difference between marketing and selling. Marketing is what happens before your costumers touches your product. To market your product, it requires careful planning and study of the market. Know your competitions, client behaviors, and the economic climate. By being aware of all these elements you can strategically present your product to the market in a way that draws buyers to you.

5.) Lack of Financial Controls
So, you found a product that is needed, you put together a business plan, got the money to pay for the raw materials, and you've done your marketing. Now sell it! Not so fast! You need to be able to account for these items. Before you start selling your products you need to get your bookkeeping right. Setting the right financial controls is the foundation to good accounting. Most small businesses owners do not have the knowledge on how to do this. That is okay, as long as you find someone knowledgeable and experienced in bookkeeping you can hire them.

Now go and sell!