What Does Every Business Need?

Every business needs revenue. This seems so obvious but there are many other things to focus on that can lead you away from this one task. Business owners are highly distracted because of their seemingly endless to-do list.

You need to make money and figure out how to do it efficiently and repeatedly. Then you need to figure out how to keep your customers happy. There are many different aspects of a business, but I want to focus on the ones that really matter and translate into revenue.

Business Model

You don’t have to be innovative to build a good business.

It is extremely hard and capital intensive to be innovative and bring new ideas to market.

There’s nothing wrong with starting a business that already has a proven model in a competitive industry.

Competition is a sign of a healthy industry with good fundamental economics.

Ask yourself what you have to bring to the table and how you can do things differently.

Understand that in any industry you’re likely going to need a runway and time to develop a customer base and figure things out.

Manage this risk by being lean and have savings to fall back on.

What Do You Need to Start a Business?

MARKETING, SALES, AND LEADS.

These two are essential for the business’s survival and growth.

It doesn’t matter what you do or how great your product or service is, if no one knows about it, it does not matter. Everything else is secondary.

You have to be able to get in front of people. The right people.

Figure out who your customer is and how you can help them.

Then figure out where they hang out and create valuable solutions to provide to them. You need consistent lead flow, or qualified people to call in order to convert them to closed business.

Communication

This all comes down to communicating your value in a simple way to get people to have a conversation with you.

People think selling is a dirty word but this is mandatory for any business.

If you’re a single owner you wear a lot of hats. Educating people and selling is number one.

Make sure your message is resonating with people and is easy to understand.

Communicate to existing customers that you’re looking for referrals. Paint a picture of the ideal referral and let people know this is how you grow your business. If you have a good product, people will be happy to refer you.

Cash – Save Your Money!

Outside of sales and marketing, you need cash to support your business.

You can get a line of credit or take out loans, but this ramps up the risk profile significantly. You’ll also be pissed once you’re cash flow positive and have to service this debt. You can argue both ways, but if you can function without the debt, do so.

People, in general, do a lot of excessive spending that is not necessary.

Be diligent and save your money. I’m talking about having years of expenses worth saving in preparation. I realize this isn’t always realistic, but do your best to have a safety net as this will help in the early years.

This can be in the form of cash in a savings account, investments, or a spouse’s income.

You can run a business on a tight budget. This just requires honesty and hard work.

There is No Silver Bullet

I say that because it’s easy to convince yourself you need certain things to be successful, but this simply isn’t true.

Spending money on bigger, better processes and improvements is usually the result of looking for a silver bullet.

Focus on the vision and doing the work. It takes time.

What’s working, what’s not working, and what can you do better? Figure out where to spend your time.

Relationships

Find good people who can help you along the way.

This can be in the form of vendors or partners.

Treat these relationships with care and you can build a great company.

 

All of these items are important when running your business. You should review your systems and processes periodically to understand what is working and not working. It is wise to invest in people. Invest in your relationships inside and outside of the office.

 

As time goes on you can refine your processes and get better and better at what you do. This will ultimately help you build the business and life you want. Good luck!

If you’d like an objective second opinion about your finances, please contact Michael Shea, a CERTIFIED FINANCIAL PLANNER™, at Applied Capital. Email him at [email protected] or fill out a contact form.

DISCLAIMER
This blog is provided for informational purposes only. Such views are subject to change at any point without notice. The information in the blog should not be considered investment or tax advice or a recommendation to buy or sell any types of securities. Some of our blogs or information therein have been obtained from third party sources believed to be reliable but such information is not guaranteed. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor’s financial situation or risk tolerance. No reliance should be placed on, and no guarantee should be assumed from, any such statements or forecasts when making any investment decision.

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