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7 Golden Rules of Starting a New Business
By Tom
Bordon
What are the golden rules of
starting a new business? Or
rather, the golden rules of
succeeding with a new business?
Anyone who is planning to start
a new business - be it startups
or business owners who are
planning to exit a business and
start a new one, go through the
same dilemma. What business to
venture into? How to choose the
right investment? What are the
chances of success...?
There is no hard and fast
rulebook for starting and
succeeding in a new business or
everyone who started a new
business would have succeeded in
it. Every business has its own
strengths, weaknesses,
opportunities and threats. But
there are some fundamental
principles that help you lay a
strong foundation for a new
business and help it grow into a
flourishing venture.
Do what suits you best
If you are a start up, choose a
business venture that excites
you; something which you love
doing. Never choose a venture
only by its financial
possibilities. There is no fun
in building up something which
you don't enjoy. If you don't
like what you are doing and do
it only because you think it
offers better possibilities of
growth, then success, even if it
comes your way, will be
temporary or unfulfilled.
If you are a business owner and
you are looking to diversify,
choose a venture that synergies
with your current one. This will
not only help you be in a
stronger position with better
business knowledge of your
industry, you will also enjoy
your new venture as a fresh area
of growth. For instance, if your
business deals with supplying
food materials, you can explore
areas in processed foods or food
products.
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Tony's
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Gender |
male |
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St.Catharines,
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Fulfill a need
Fulfilling an existing demand is always
safer than creating a new demand. It is one
golden rule that always works for new
businesses that do not have the financial
muscle to start a farm fresh new concept and
convince prospects that they do need what
you want to sell to them. It is safer to
venture into a business which produces
products and services that fulfills a need
which customers know they have.
But remember to identify the USP (Unique
Selling Proposition) of your product/service
to make it stand out from the crowd of
competitors. Once you yourself are convinced
about your product/service, you will be able
to convince your customers to buy from as
opposed to your competitors.
Are the margins healthy?
The growth possibilities are always better
in businesses where you can have a healthy
gross profit margin. If the difference
between your cost price and selling price is
narrow, you will not have much left to plan
expansion, hire more people, promote your
business or save for reserves. Therefore,
choose a business that offers a better
possibility of profits.
Give the right picture
One golden rule that many start ups and new
businesses give short consideration to is
promising more than what they can deliver.
Don't oversell your products or services by
promising to your customers something you
can't deliver. It is always better to beat
expectations by providing a
better-than-expected product than handling
disappointed customers who expected more
than what they received. Be truthful about
your products and true to your buyers.
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Business plan is a must
Before jumping into a business,
create a well-detailed business
plan which will include
profit/loss forecast, cash flow
analysis and break-even
analysis. Creating a business
plan will help you analyze how
much your start-up costs will
be, what your cash flow
requirements are and what your
marketing strategy will be. Once
you have a well-laid out
business plan, it will be
convenient for you to work your
way up, set your targets and
plan your growth.
Keep all agreements in hard copy
writing for your records
Keep all your contracts and
agreements in hard copy. These
include contracts detailing the
sale of goods, rental
agreements, paperwork regarding
purchase orders, and storage
agreements. Don't rely on verbal
agreements. Business is
business, and you will regret it
if you do not document
everything.
Remember to keep a backup of all
your records, because if you
store everything in on one
computer hard drive without
regular off-site backups, you
are creating a recipe for
failure. One hard disk crash can
be disastrous. Don't take
shortcuts when it comes to
keeping records and agreements
in safe and secure hard copy and
backups.
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Seek professional help from CEO
clubs
It is a good idea to seek
professional help from experienced
people who have rich experiences in
starting and succeeding in new
businesses. Join a CEO club where
other CEOs from non-competing
industries can properly guide you on
how to go about starting your new
business and at the same time
handling the current business
successfully. A CEO association can
also help you create an effective
business plan and offer you
practical suggestions.
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ABOUT THE AUTHOR:
Tom Bordon is a freelance writer who has extensively written about CEO association in Atlanta and executive business coaching. His articles focus on guiding CEOs, COOs and top level executives in starting a new business, selling a business and making exit planning strategies.
Article Source: http://EzineArticles.com/?expert=Tom_Bordon
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