How to Start and Grow a Successful Traditional Business
Starting a business could be challenging, daunting, and above all an exciting and
rewarding experience. Let us suppose that you have a promising idea, and the entrepreneurial
attributes to launch a new business. What factors must be considered? To start
a business requires careful reflection and decision making about the following:
- Business planning
- Business financing
- Employees management
- Customer orientation (Marketing)
All of these
factors, though, are important in starting and growing a successful business,
but the first two factors (planning and financing) are of primary concern
(especially) during the start-up phase. The rest three are at the core of
actual running and managing of the on-going business. A number of professional literatures
extensively treat this subject, for example Understanding Business . The section that follows briefly
sheds light on these factors.
Business
Planning
It is an often
cited remark that ‘‘He who fails to plan, is planning to fail.’’ Yet, it is
surprising how many aspiring entrepreneurs are anxious to start a small business but have only a vague notion
of what they want to do. Simply put,
planning your business means thinking ahead, and relating the possibilities of
the future to the realities of the present and past things. The work of
thinking things through is expressed in
a final document called a business plan.
It forms a framework for you to start and grow your business.
Most scholars
and practitioners have agreed that ideas
are a person’s greatest asset. And
it is common experience, among entrepreneurs, to come up with ideas for
business and start sharing the ideas with friends and other business people as
well as with Professors. Joseph Cossman,
a celebrated entrepreneur, cautions that:
Most of our products are the result of our own ideas. In the long run you are on your own, so let your judgments be your guide. But keep this in mind…. A new idea is a delicate thing. It can be killed by a sneer or worried to death with a frown. Treat your own ideas like children – coddle them, keep them away from the chill of adverse criticism, have faith in them and – they’ll grow up into strong, mature products to support you in your old age..
The idea generation/formulation phase is crucial to
successful business planning as it is with other human activities. Ideas are
man’s greatest asset more valuable than even capital and experience.
We have emphasized that planning your business is of
primary concern in starting and growing a successful business. The primacy of
idea was underscored.
Financing your business is also of importance.
Business Financing
Entrepreneurs, like most people, require money in
starting and growing successful businesses. Sources of business finance include
– personal savings, bank financing, relatives, former employers, government
agencies, and lease-purchase agreements. Investors such as Venture Capitalists
and Angels may also fund your project. Entrepreneurs must not only be well
informed in identifying and securing start-up capital, but they must also
nurture a profit-orientation.
Ability to balance profits and expenses to attract customers
is vital to business success.
Customers Orientation (Marketing)
In business, opportunities exist in the market. And
one of the most important elements of starting and growing a successful
business is: knowing the market. A
market comprises people with unsatisfied wants and needs who possess both the
wherewithal (resources) and the desire (willingness) to buy. In marketing terms, the key to spotting or
perceiving a potentially successful venture is to find a need in the market,
and look for ways to meet that need.
For an entrepreneur to spot a genuine need s/he has
to listen to people (potential customer) for obstacles that prevent them from
completing specific tasks, and listening to what potential customers say
frustrate them. These are first hand
avenues to learn what people really need and might potentially buy.
Another means for an entrepreneur to meet the
customers’ needs is to offer top quality products or services. Concerted efforts should be aimed at meeting
or exceeding the customers’ satisfaction. This way, you not only win customers
but also keep them. This translates into repeat purchases and attendant
profits.
Employees Management
In the course of business growth or expansion, it
becomes imperative that the entrepreneur can no longer go solo, and sustain
growth and profits. It becomes impossible for him to oversee all details,
regardless of the entrepreneur’s commitment in time (resource). Consequently, he has to recruit, retain and
reward employees. Managing employees,
the most valuable of all organizational resources, is tough. People have varied orientation and
backgrounds, among others.
In recruiting, the entrepreneur should consider
promising individuals whose visions are aligned or as close as possible, to the
enterprise’s vision. We suggest some attributes to look for: honesty, willingness to learn (humility, as
opposed to corporate hubris), and commitment.
It is not enough to hire top talents, qualified or
trainable individuals; employee’s relations is important. The entrepreneur
should endeavor to make his employees’ work more challenging; their ideas more
accepted, and above all, treat employees more respectfully. This way, they are
more often satisfied in their work.
Employee satisfaction with their job almost always brings about improved
performance/productivity. The entrepreneur will also do well if he influences
the discretionary efforts of his employees. In addition, Nickels and his colleagues argue
that entrepreneurs can best serve themselves and the business if they gradually
recruit and groom employees for management positions. This will foster loyalty
between the manager and other employees, and among themselves.
Keeping Records
The importance of records keeping to the effective
operation of businesses – small or large cannot be over-emphasized. It is good
for the entrepreneur to follow good financial procedures. This means you must
know something about accounting to understand the language of business. The
entrepreneur should follow the rules of business; have control over financial
standards, cash flow, return on investment, among others. The point here is
that nurturing an effective accounting system early will check against probably
losses or failures later.
The entrepreneur might hire the services of a good
accountant who sets up such effective accounting systems and shows the
entrepreneur how o keep the system operating unhindered. It is also important that the entrepreneur,
as with other business persons, is able to read, understand, and analyse
accounting reports and financial statements, so as to run the business
effectively.
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