Being an accountant is not just about the numbers. Through the work we do with business owners we often identify the issues or problems that are holding them back and because we have seen it before, we can advise on solutions or a different way forward. I have worked with a number of business over the years and I realised fairly quickly that the key principles necessary for success are generally common to all businesses. This is a list of 9 tips for business success that you might find useful.
1. Know your customer: This may sound obvious, but you need to focus on what they need and want so not only are they happy to come to you today but they will come back next week. Good service, consistency and a decent product or service for a fair price is an absolute must. People are happy to go back to McDonalds again and again because they know what they are getting. Offer discounts or loyalty bonuses to repeat customers or a reward for referral. Focus specifically on the type of customers that you want and try to aim your marketing directly at them. Obtain feedback from customers about how they have heard of you and why they use your products or services so that you can tailor your marketing campaigns to your target market .
2. Know your products: In particular know the benefits of your product as seen from the viewpoint of the customer not just the features that it has. For instance if you are selling a mid price range vacuum cleaner the features it might have over the basic model are its improved suction and that it is light weight. But you would need to emphasise to your customers the benefits of the improved cleanliness and that it is easy to carry upstairs. This should encourage them to think that the added value to them means spending the extra money is worthwhile.
3. Know your brand: This is what makes you unique out there from all your competitors. Your might be trying to compete on price but this is very difficult to sustain in the long term and generally only giants like Amazon or Tesco are able to achieve this because of their relationships with suppliers, wide customer base and the volume of sales that they have. If you have a niche product or service then you can compete on convenience as you may be the only provider for your local area such as a corner shop on a housing estate, or you are recognised as a significant supplier with a wide stock of obscure items, such as specialist model kits. Most businesses try to distinguish themselves using a unique selling point or USP. This might be the quality of your home made cakes that can’t be found anywhere else, or the quality of your cleaning service is such that you have a regular customer base. Whatever your strengths, make sure that you know what they are and can describe them to people as part of your marketing strategy.
4.Try to upsell:. When you have customers in front of you or online or on the phone, then it is easier to persuade them to buy more of your products or upgrade their choices which is all money for your margin, than it is for you to try to find new customers. Generally when they come to you for a specific product they will have already spent the money in their mind. So it is a smaller step to encourage them to spend the difference on upgrading than trying to persuade someone from cold to spend the whole amount in the first place. Offer a complete package or an upgrade as a deal. So a tea shop could offer a coffee and cake deal. A camera shop may offer a camera, memory card and case as part of a package, or an optician can offer higher quality scratch resistant lenses at a smaller increased price than normal.
5. Review your management accounts: The more upto date information that you have on your product sales and their associated costs the more accurately you can plan going forward. Maybe you have a range of products and there are three products that provide 75% of your profits, You would want to concentrate on those and maybe eliminate those products that are loss making. For instance you may have a product that sells for a reasonable amount, but if you are not selling many and it takes up a lot of your time then it is loss making. If you need advice on how to prepare management accounts then speak to us or your accountant, you may need to change your book keeping system to get the information you need. We can help you with this or we can provide a management accounts preparation service, just speak to us on 01606 602075.
6. Keep control of cash-flow: The main reason a number of businesses fail is not because of lack of sales but lack of cash. This is particularly a problem if a business is growing quickly and has money tied up in stock, assets, customer orders or debtors. Try and keep costs as low as possible and negotiate time to pay creditors. ensure you have a system in place to chase debtors. Plan your budget for your year ahead to work out when the big bills are due and try to ensure there will be enough cash or finance in place to pay them. Plan staffing requirements, can you manage with part time or temporary staff? If you will require extra finance allow plenty of time to get it in place and explore different options to get the best deal for your business.
7. Obtain advice: Sometimes we all need a second opinion to help us clarify our ideas and to test different options. This might be from family and friends or paid advice from your legal advisor or accountant. The best entrepreneurs surround themselves with a team of people to encourage them and to keep them in check occasionally. The entrepreneur will always make the final decisions but they will have all the information and advice they need. Consider who might be on your team, don’t be afraid to make use of them and think about approaching someone experienced in your field to be your mentor. As an accountant I think being there to support clients as and when they need us is a key part of the service we offer.
8. Monitor your marketplace and the competition: Things can change very quickly and you can get left behind all too easily, just think of Blackberry. Small businesses can have an advantage over bigger business in this respect as they are usually closer to their customers and have an ear to the ground. It is worth spending some time every so often thinking about this issue and identifying the threats and opportunities you face, keeping upto date with the developments in your sector and ways that you can improve what you are doing. Read industry or trade magazines that are relevant to your business. Encourage your staff to make suggestions and even implementing small changes can make a big difference in time.
9. Have goals for the future: It is impossible to stand still, and though this is a cliche, if you are not moving forward then you are going backwards. Think ahead and dream. Think about why you are doing what you are doing, and where you want to be in 5 years time. Put together a plan with your main goals, such as opening 3 more shops, having 10 employees on board or being the dominant supplier for your region. Add objectives to define your goals, they should be SMART to be effective, this means they have to be Specific, Measurable, Attainable, Realistic and Timely. You should then ensure you know what steps you need in place, day by day to achieve your objectives and ultimately your goal. Suppose you want to expand with a new shop, this is a specific objective. Consider then if this is reasonable, Do you have the finance in place and location in mind? What is your time frame for achieving it? Can you put in place criteria to measure your success, ie the date the shop opens. Is it attainable? Do you have the time and resources to go for it? Then put in your plan what steps you need to take to achieve the objectives and when, such as meetings with the bank or negotiations with letting agents.Then you will have in place your plan for success.