Top 50 Business Tips
1. Start a business doing what you enjoy doing. Running your own business can mean long hours so make sure you are interested in what you do.
2. Can you sell your products and get customers? If you have no customers you have no business.
3. Carry out market research BEFORE you start the business. Use weekends or take a few days holiday to really research and visit potential clients.
4. How good is your own trading name and image? Which is the best name out of these 3 which all do exactly the same business?
1. A & B Services
2. Midland Technologies
3. Rapid Computer Repairs
5. Do you want to be a friendly local company or do you want to convey a national professional image - your choice of name can do it either so think about it carefully and get specialist help - again, read our information on company and business names.
6. Do you need a corporate image? Do you want to put a trade mark or brand design on your product and carry this through all your stationery, brochures and business cards? Choose one carefully and check it out first before using it. It is very important that you employ the services of a trade mark agent, such as ourselves, to ensure that your proposed trade mark is available for you to use and that it does not conflict with any identical or similar trade marks. Brochures are too expensive to scrap so get your image right before going to print.
7. Your business premises - do you need a prestige expensive base or will somewhere cheaper do? Can you start off from home? Does your council have a list of special cheap accommodation for new businesses? Most do.
8. Avoid signing leases - it's better to have a short rental. If your business fails or even succeeds and you need bigger premises you will be stuck with the lease. Be a tough negotiator; if you do sign a lease ask for a break clause after 12 months so you can cancel it without penalty. If they don't agree look elsewhere! Negotiate-Negotiate-Negotiate. There are lots of shops/office/facilities available everywhere!
9. Avoid giving personal guarantees, they can destroy you. Do you really need that new car/flashy Shop/expensive equipment? Are they really essential? Can you do business without taking on these debts? You can if you try - don't get too greedy.
10. Don't pay any fees to obtain grants or loans to start the business. Only cowboys charge fees and you will end up with nothing. Contact your local Council or Enterprise Agency in the Yellow pages under "Business Enterprise Agencies" to obtain a fact pack about grants and start -up loans.
11. Have you got business skills and knowledge? Do you need to understand the Internet or how to sew sequins on ball gowns? What skills do you need in your business? List them all on a piece of paper- you may be surprised how many you need. How can you improve your knowledge? Does the local college run a night school? Don't start the business until you are satisfied you have the right skills for your enterprise.
12. Honestly - how good is the idea/business? Is there really a market for this product/service? - Think it through. Have you got the support of your wife / husband / partner? - Think it through - It's very important!
13. It is a minefield to go into business with someone else. Get the legal agreements drawn up before you do anything else. How committed is your partner? Do you trust them? Have they got any special skills you need? Would you be better on your own? Why are you choosing this partner? Only you can answer these questions - but you are reading these tips, is your partner? If not then forget it.
14. Work out how many customers you need to ensure all business payments are met.
Income 100 Customers per year paying you £250.00 = £25,000
Outgoings of £11,000 leave profit for you of wages £14,000 you now know your target is 100 customers, or 2 per week minimum.
15. Keep your personal outgoings (mortgage/bills etc.) out of the company expenses or you will confuse the calculations.
16. Can you work out profit mark ups? You must know what your product/service costs you, how much do you want to sell it for
|Labour & to assemble 2 hours @ £5.00 per hour||£10|
|Advert Production of Leaflet Brochures||£3 each|
|Office overheads £5,000 - 100 units sold||£50|
|Delivery / Postage / Packing||£12|
a) 50% Profit mark up = Selling Price of £187.50
b) 100% Profit mark up = Selling Price of £250.00
Which price do you sell at? How does your price above compare to competitors?
100 Sales at price (a) only bring in £18,750
100 Sales at price (b) bring in £25,000 To bring in £25,000 at price (a) you need 133 sales = A Third More Sales for the same income!
Why should anyone buy from you? What is special about your product / service? Highlight that special feature most strongly.
17. Invoice your customers as soon as possible, offer % discounts for payments by return. This will help your cash flow but that % needs to be taken off the profit margins, so your income will be less.
18. Cultivate your good customers - people who buy regularly, who like your product and are happy to deal with you.
19. Research why customers only bought once from you. Were they dissatisfied? Why? Examine your own business, ask for their views and improve it.
20. Don't stand still. If your customers bought from you because you offered something new then they will go to a competitor just as easily. Come up with new ideas, offers and services to keep them interested.
21. Which is the best of these:-
A business that has one product it sells to 100 customers.
A business has 2 products it sells to 50 customers.
Both achieve 100 sales so would appear equal but the second company has already earned loyalty by selling extra products, it could sell 3 products to the same 50 customers and increase sales by a third.
The first business has one product to offer but could specialise in that and offer that product on better terms and it has more clients. In fact neither is better but which is best for you? Do you specialise or sell a range; you must be sure of what you intend to do.
22. Few businesses can live on repeat business alone; develop a strategy for gaining new customers. Develop a target of how many new customers you want each month. If you make the target high you will get disillusioned if you don't reach it. Set if fairly low and your attitude and outlook will be different as you exceed your own target.
23. Plan your time productively. Many books are written on this subject, some good-some nonsense. Simply what do you want to achieve each working day? Set out your customers goals of must do / could do. Do all your daily must do before getting side tracked into could do.
24. Running a business has lots of duties, pressures and things to do. How do you keep track? An M.D. of a Major PLC simply uses an A4 note book to write down everything that needs to be done as it arises. Over the next days these jobs get ticked off the list till the page is full of ticks. Then simply cut off the top corner of the page. At a glance you can tell from your book which pages have things that still need doing and are outstanding. It's simple but it works.
25. The 1st year is the most vital and risky for any new business. Can you survive? Plan the whole year, plan your sales/promotions/campaigns/plan your adverts/plan holidays and breaks/plan your work load and plan for the unexpected - because it will happen.
26. Is your product / service a new idea or are you improving an existing one? Who are your competitors and Customers? How many are there? Will people buy from you? Those questions are the key to your business plan; you must do one but include these points.
27. Do you have enough money to live off for the first 3 months when you must assume money may not be coming into the business? If you can re- invest money in to the business during the first 3 months you can make your business stronger.
28. Make sure your customers pay on time or you will fail. Allocate time each week/month to chase up accounts.
29. How to bring out the message in your sales brochures -etc use AIDCA.
Don't just describe your service / product = it's boring don't say your better than a National Company = it's risky. Use AIDCA to attract with something new and interesting that the customer wants and they will buy from you.
30. Don't make dishonest or misleading claims. Is your story believable?
31. Put yourself in your customer's position. The customer below has all these worries/problems. Can you take away any of them? If you can he will buy.
Just look at those worries he has. If you take just one, say HIGH OVERHEADS and say to him I can supply my product 10% cheaper than you now pay, you help save on his high overheads. Sell to him on the basis of his worries. Try to ease them for him.
32. Look at the other worries, does your product fit into any of those areas? If so that area becomes your USP.
"Dear Mr Smith, I can help you to save 10% on the cost of widgets you presently buy. This 10% saving to your company will help reduce your overheads and release funds from your budget to expand your business. In fact your saving can be higher as we offer special discounts to new customers which you are eligible for. I will contact you to discuss these saving to your company".
Would such a letter interest you? How many of his worries have you matched?
33. Target your customers very carefully. Make sure you are reaching people who want/need/use your product.
The first is awful and meaningless. The second is reasonable but too general. The third is specific-who they are? What they do? The name says it all! Choose the right name - refer to our information on company and business names.
34. Are you creative? Can you devise your own leaflets, brochures and letters? Get copies of all your competitors literature. Don't copy them, be original.
35. Print all your brochures, sales literature in a type style that is easily read. Did you know research shows easiest type style to read is Serif or Garamond? If people can easily read your literature they will remember your message. 75% of all literature sent out fails this simple rule. P.S. Avoid Italics where possible - they are harder to read.
36. For posters use Sans Serif, avoid under lining text or headings, use BOLD type to lift the message.
37. Have you got USP in your literature, adverts and brochures? USP is Unique Selling Proposition concentrate your sales material on key points. How you can satisfy the customer? Why you are better? What is unique about your product/service? What can you say that others don't?
38. The reader of your sales literature/adverts is the person you sell to. Get them involved, don't say "we do this or that" say "You will benefit by" - talk to that one person only, convey your sales message to them.
39. Choose where to advertise your business carefully. The local paper is no good if you are a specialist machinery company. You can get a list of specialist trade publications from a book called BRAD from the nearest reference library. Brad lists all newspapers, magazines, etc. So choose the best publication for your type of business.
40. The best advertising is free. A local success story is welcomed by business editors with an interesting photograph. Send out a press release to magazines in your trade but remember they get 100's of press releases so again why is yours special. Why should your story be chosen? Has it got USP?
41. The one in four rule - choose magazines carefully
One in four has an increasing circulation
One in four has a regular stable circulation
One in four are new publications
One in four is sinking fast.
Make sure your money is spent with the one that is the best. Ask for proof of circulation
42. You can get massive discounts on adverts by ordering space near the publication date. You should be able to get up to 75% off published rates if a publication has space it needs to fill. Have your advert ready when you ring around be ready to move quickly.
43. Should I go in paid for magazines/newspapers or free ones?
|All Paid For||Free Publications|
|Few Adverts||Lots of Adverts|
|Expensive Advertising||Cheap Advertising|
|All are Read||Few are read|
|High Profile||Low Profile|
|Good Credibility||Poor Credibility|
What do you think?
44. If you do advertise ensure your advert is in the section that relates to your business.
45. Try to get your advert on the TV Page most people look there.
46. The smaller the advert - the lower the cost, the more you can repeat it. Bigger adverts do not necessarily get bigger sales.
47. Beware of giving better offers than the competitors give. If you give a special offer and spend £s promoting it what happens if a competitor betters what you offer! You can play right into the hands of a competitor. Be unique!
48. Study other adverts/promotions which do you think is good/bad? Why did you answer this advert? Did this information hit the right spot with you?
49. Be enthusiastic in your promotions - if you are not excited or enthusiastic about your product/service then your customers won't be either.
50. Exhibitions are very expensive to new businesses. Be very wary of the high costs of exhibiting, will you actually make money? £5,000 spent on an exhibition bringing in 20 sales means a cost per sale of £250. Take £250 out of your profit margin and what have you left? £5,000 spent on Newspaper adverts might bring in 40 sales that means a cost per sale of £125. Is that better for you?
Further information on starting a business can be found at Business Link - Guidance on setting up a new business
Don't give up, many very successful businesses succeed because the owners did not give up when the going got tough.