from Power Business.com 8/16/14 enhanced by Peter/CXO Wiz4biz 9/14
Certain businesses put the chances of success in your favor. Other businesses stack the chances of success against you. Here is a list of seven things you need to have a successful business and that you should consider when starting your own company.
1. High Profit Margins. Low profit margins are dangerous to your company’s survival. If you only have a tenuous few % of net profit margin and prices rise a few %, you are in trouble. Higher profit margins allow room for error and changing cost structures. Who cares if your business generates millions of dollars in revenue, but only can earn $10K? It is what you keep that matters.
2. Good Revenue per Sale. This is often missed by many. It is difficult to succeed if you are selling a one-dollar product. To make a million dollars means you must sell one million of your product. That’s a lot of sales. If you are selling a $1,000 product then to make a million dollars you only need a thousand sales. Guess which level of sales is an easier to process and fulfill for a smaller company?
3. A Proprietary Product. Or, at least, a tremendously growing area where all the companies in the field can’t keep up with demand. A proprietary product is one which another company can’t just begin producing & selling. Patents & copyrights are two ways to secure a proprietary product.
4. Something that you Love to do. It is difficult to do something well if you don’t feel “passionate” about it. Choose to build a business in a field that you love, and you will find yourself enjoying it. This will help your lead to success. Never just enter a business because the financial numbers seem to indicate a great business. To really make money demands growing a business, and this could take a long time. Be sure it’s something you want to do. Something related to a life-long hobby or interest is ideal.
5. Good Cash Flow. It is possible for a business to be generating excellent sales & profits, and yet be losing cash. You need cash to pay bills. A cash strapped business is a business that will struggle to grow. Do a cash flow projection for your start-up business. Then as you grow it, make sure you always have good Cash Flow to meet your obligations.
6. Opportunities to Grow. What are the growth prospects for your business? What will be required for you to grow the company? Many entrepreneurs start a business and are happy when they see it making money. They are often not as happy when they realize that profits have leveled off. Think about how you will grow. As you grow you will need to learn to delegate. You may need multiple products or services. Doing more of a similar thing in the same way, is easier than changing the way you operate.
7. The business must be something you are Psychologically-suited to do. This is not the same as loving the area. Some people are more outgoing & social than others. Other people are more reserved. Each is suited to building different types of businesses. Needless to say, a business that demands much personal selling and personal customer inter-action might not be ideal for the more reserved person. Yet, such a person could very successfully run a Internet-based company.
Comments: Do you have any other Ideas of what a business needs, when it starts up?