How to Make the Most Of Small Business Opportunities

There are still many small business opportunities open for new entrepreneurs and building the successful business of your dreams does not have to remain out of reach. But, before deciding to run with your self employment ideas and go out on your own be sure that you have taken all possible steps necessary to ensure success. Even some of the best small businesses do fail within the first year of operation because the new entrepreneur has mismanaged the new business startup. This is often due to lack of knowledge of the basic business principles, particularly knowing how to manage business finances and as a result funds run out before the business is properly up and running.Most new business owners work very hard in their business when they first start out and failure is hardly ever due to the lack of trying. Unfortunately, the lack of understanding of how to manage a new small business means that there is no correlation between the amount of time spent working in the business and the probability of success. There is however no reason why the downward trend can’t be reversed or better still prevented. The secret is in learning how to plan to succeed. Many new business owners have some idea of how to write a basic business plan and quite a few have indeed gone to the trouble of actually committing it to paper. Unfortunately, writing a business plan and planning to succeed are two totally different things. Generic business plan templates are easily obtainable and most of them include general instructions on how to complete them. The problem is that, at the time of completion of the first business plan, it contains mainly untested goals and financial estimates. Unfortunately most of these initial business plans disappear into the bottom drawer never to be looked at again. With a lot of luck the business may survive and the goals set could be reached but it can take much longer than initially anticipated and finances can be stretched well and truly beyond the originally expected set-up costs. A very large percentage of new businesses however don’t survive the first year. So, don’t just plan but learn to plan to succeed.The following high level outlines show the difference between the critical elements of a basic business plan and a true plan to succeed.A Basic Business Plan:1. Goals –
I will achieve goal A
I will achieve goal B2. My Strengths are –
A
B and
C3. Financial Best Estimates of Profits –
End of year 1 $ x,xxx
End of year 2 $ xx,xxx
Planning to Succeed:1. Goals –
I will achieve goal A within N number of days by carrying out action X
I will achieve goal B on this specific date by carrying out action Y2. Strengths and Weaknesses –
The strengths that I bring to this business are: A, B and C
My weaknesses that could affect the success of my business are: X, Y and Z
I will take actions 1, 2 and 3 to overcome or negate my weaknesses.3. Financial Plan –
Conservative profits and losses are projections are calculated for each of the first 5 years
Detailed cash flow projections for the first year are calculatedThe difference between these two approaches to business planning is that the basic business plan often amounts to no more than a best guess while “planning to succeed” may need a bit more effort to compile but it can save you time, money and a lot of heart ache.Of course it is much easier and quicker to just jot down some goals but without the measurements of time and action it will be extremely easy to get side tracked and you’ll have lost sight of your goals before you know it. If on the other hand you have set time and action targets and you know your strengths as well as weaknesses then you will be able to monitor your progress and, what is more important, make qualified adjustments to suit changing circumstances. Stay on target and you increase your chances of success exponentially.Lack of proper financial planning can be another problem point. Almost all new business owners dream of building a successful business that will, if not make them rich will at least provide security and financial freedom. There is absolutely nothing wrong with aiming high but there is a big difference between being a dreamer and being able to turn dreams into reality. I have seen many new businesses fail because of either the lack of proper financial planning or the lack of monitoring of a basically sound financial plan. Making up a good financial plan is not overly complicated but if you are in doubt about your own ability in this area then seek help before it is too late. You can either employ a financial adviser to do it for you if the cost is within your budget or you could follow a small business course and learn how to do it yourself. My personal preference is the latter method because not only can it save you money in the early stage of setting up your business but by learning the business basics you’ll be able to monitor your progress and stay on top of the business even after your business has grown to the level where these tasks can be outsourced.In conclusion, please remember: Even the best small business opportunities can quickly lead to failure unless you know how to plan to succeed. Spending a bit of time and effort on a good small business course to get the business basics, as applicable to your industry, down to pat will well and truly pay off in the long run.