~Small Business Growth Assocation, 10 Rules Of The Road Successful Entrepreneurs

Starting and operating a business is a risky proposition. You need all the help and support you can get. The foundation and mission of the Small Business Growth Association (SBGA) is to help you minimize the risk, by bringing small businesses together in a unified effort.

There are many perils facing the small business entrepreneur that can be overcome by helping each other. But first, let me introduce you to the rules of the road. Like most challenges we face in life, there are usually certain classic rules that we can turn to for solace and guidance. With business it is no different. Whether you are a retail store, a service or manufacturing venture, there are basic rules which will always prevail.

During our years of business experience, we have watched with great interest just what determines a successful entrepreneur. The list of rules compiled below are followed to some extent by each of them. The rules are simple to list but considerably harder to implement.

1. Understand the environment.

In the small business world this means, among other things, your market, competitors, the economy and simply what it takes to be an entrepreneur and survive. Too many entrepreneurs get caught up in the glamour of owning their own business and don't fully consider the risks and traumas that the environment can inflict upon them until it is too late.

2. Know how much capital you need.

Survival prospects are particularly dim for under capitalized businesses. For start up businesses, it is suggested that you have enough capital to carry you at least six months to a year or until you make money. However, it is not unusual for businesses with sufficient capital to encounter cash flow difficulties because of mismanagement of funds or poor budgeting. Underestimating capital is probably the most common mistake of new businesses. Make sure you have adequate capital because the very best of management talents cannot overcome a deficiency of money.

3. Know how to hire, train and motivate people.

As a business advisor the number one complaint I hear is related to staffing difficulties of some sort. However, many of the problems could be alleviated by simply putting more emphasis on the process of hiring, training and motivating. It is astonishing how little focus is put on these three functions by the average entrepreneur. This is especially visible in the retail sector, where employees efficiency may be the entrepreneur's most important resource.

4. Know how to plan ahead.

Most business experts will attest that planning ahead is the most critical function and entrepreneur must perform. But surprisingly estimated that only 5% - 10% of entrepreneurs ever develop a workable, viable plan. It is not unrealistic to say that the development and implementation of a comprehensive, well thought out, concise business plan will increase chances of meeting your goals significantly.

5. Understand the importance of controlling your business.

It is said by many management experts that an entrepreneur can only control up to 20% of what happens to their business. It is also stated by these same people that the entrepreneurs fortunes heavily depend on how well they control that 20%. The importance of controlling a business can be compared to the value of instrumentation on the dashboard of an automobile. How long do you think you can drive a car without knowing all the critical details concerning gas, water, oil, heat, and so forth. It is the same with a business because there are many crucial aspect such as cash flow and profit margins that require consistent and detailed control.

6. Know how to market and sell you product or service.

This may be the most difficult function for the entrepreneur. Simply having and knowing your products or services well is one thing, marketing and selling is another. Most entrepreneurs confuse marketing with promotion. Promotion is part of marketing, but marketing has other aspects which are often neglected. If you go back to 'Business 101', you know that marketing means the "Ps": Packaging, Promotion, Placement (Distribution), and Pricing. Of the "4Ps, lack of knowledge regarding how to price their product or service is one of the top four reasons that the small business entrepreneur fails. It is not enough to just promote, you need to understand the total marketing and selling concept.

7. Be people smart.

One of the characteristics that is most prominent in many successful entrepreneurs is their ability to understand people and communicate effectively. Whether it is customers, employees or peers, a good entrepreneur knows the needs of each and uses that knowledge to their advantage. Although relatively little is written about being people smart and the importance of communication in business, it is unmistakable the edge that the successful entrepreneur has over other competitors.

8. Understand the importance of location.

Any list of tenets or rules about business success probably would be remiss without some mention about the importance of location. Although this factor may not always be as important in manufacturing or the service industries, it quite often determines the fate of the retail store. Where a retail store locates can be as important as what it sells.

9. Know how to manage a business.

Although it may seem unnecessary to mention such an obvious factor, few entrepreneurs understand all the function required to start operate and grow a business efficiently. In a nut shell, a successful business manager must gather the necessary resources (money, man/women, methods, machinery, materials and markets) and then apply good, sound and basic management functions (planning, organizing, communicating, directing, controlling and staffing). If this is done competently, a business will most of the time, flourish. However a cautionary note was indicated in a 1984 study by Dun & Bradstreet which stated that 92% of business failures are attributable to the incompetence of management. Many other studies have echoed these same type of results. Management skills cannot be taken for granted.

10. Maintain a positive attitude.

Let's face it, owning and managing a business is difficult and challenging and takes the constitution of a riverboat gambler. There are going to be the inevitable ups and downs. But through it all the capability of maintaining a positive attitude is another noteworthy characteristic of the successful entrepreneur. They just will not let anything get in the way of reaching that dream.

This is an condensed version of our booklet "10 Rules of the Road". If you are serious about learning the right way to run a business, you will want to order this booklet now!

An investment of $9.95, plus $2.95 shipping and handling, can very well be your best investment for the future success of your business.

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