Archive for January 2012
Small Business: The 5 Major Problems in Growth
Planning for growth is the key to business development. Dealing with growth is a crucial issue for all developing companies. Successful company development depends upon profitable growth.
The problems in the growth of small or start-up companies cannot be tackled in isolation because they are interdependent. Companies which grow without considering the key areas will eventually run into problems. This will result in crisis management which will hinder the company’s development.
The 5 key problem areas
1. Lack of financial resources.
2. Management problems.
3. Inadequate systems.
4. Inappropriate marketing.
5. Lack of planning for future.
Lack of financial resources:
Under capitalization is one of the key reasons for failure of small business ventures. Lack of financial resources is a major problem for small companies. The small companies generally have four possible sources of funds which are:
1. Internally generated profits.
2. Overdraft and loan funding.
3. Additional equity financing.
4. Corporate venturing.
Cash is a key resource because, as well as being profitable, companies must be cash-generating to survive.
Management problems:
Any growing company must undertake a process of management development to ensure that the organization has a suitable management team which will meet its present and future needs. Management problems, in terms of lack of quality, experience and depth of management, have always been one of the major reasons for company failure.
The following areas must be explored:
1. Development of existing management.
2. Additions to the existing management.
3. Complementary relationships with external advisers.
Inadequate systems:
Small companies particularly in the start-up phase are characterized by a number of informal systems which rely on the direct involvement of the management. Control systems are set-up to provide information to the management. Information is needed for control and until you have control you cannot increase performance. Major areas in which adequacy of the existing control systems should be examined are:
1. Financial systems.
2. Production systems.
3. Marketing systems.
Inappropriate marketing
Marketing problems are one of the main reasons for failure of business start-ups. Before a company enters into the expansion phase there has to be re-examination of the marketing approach. The marketing strategy will have to change as the company grows.
Lack of forward planning
The most crucial step in success is proper planning for the future. But total lack of planning or inadequate planning is the major problem of small business. This means that there is no systematic, analytical investigation of the business, its environment and options available to it in determining the way ahead.
Conclusion
A proper analysis of these key areas and adequate planning along with proper management will lead to assured success and growth of the company.
Small Business – Different Ways to Advertise
As a small business owner you may lament the expense of advertising but know that it is an essential part of your business if it is to survive and to prosper. The only good thing in the end is to have a successful advertising campaign and claim the expenses back as a tax deduction. Either way, you will claim the advertising as a business expense but its much, much better to do it from the profits than a loss.
So, because advertising is so expensive to do it the traditional way through the classifieds or a Newspaper ad, which today has a very dubious success rate, you will need to find an original, memorable and very effective medium in which to do it. This calls for some ‘out-of-the-norm’ thinking. How good are you at being different?
If you are running a small trade business you will need a really good network in today’s world to survive. Why not gather a group of other trade businesses and do it together as a working group? Chances are anyway that you will need to call in one or more of them to do a job so why not get together with other trade businesses that you trust and do it together as a group to cut expenses?
Most small service based businesses have a network in place from which they get a fair percentage of their work anyway. By banding together on some activities like advertising and marketing, you both or all benefit from the exposure and it doesn’t break the bank for any of you. Just be sure to use this method though only with people you trust implicitly and know are financially secure.
If you would prefer to advertise on your own, then why not use more vehicles on which to do it? Using vehicle Decals are a great mobile marketing idea and if you are after exposure for your business, seeing a dozen cars or more on the road in your town or region gives the impression that you are a big business and seem to be everywhere. Next time someone needs a plumber or a financial advisor they are more likely to remember your name.
How to get these extra vehicles to carry your vehicle decal? Advertise for people who wish to earn an extra income, use their vehicle on a daily basis, either have a business that calls for a lot of driving or they have a regular car park with good exposure where the car will be frequently and regularly seen. The only two essentials that they must have is (1) a relatively new car not older than two years and (2) a clean driving record. There are many people in the world today who would be willing to negotiate a fair fee to put your decal on their car for a month or two and show it off regularly around town for you.
Online Business – How 7 Stupid Ideas Became Major Success
Online business and marketing is known to be tricky. To make things happen, you need to be creative and full of ‘smart’ ideas. But some stupid sounding ideas really became major success in online business. Check those out!!
Million Dollar Homepage
1 million pixels and charging just one dollar for each pixel?! That does sound like the dumbest of the ideas for an online business enthusiast. But wow! Alex Tew, the 21-year-old who devised the idea, became a millionaire!!
PickyDomains
How about hiring another guy to mastermind a cool, one of a kind domain name that rocks your business? It’s hard to believe that people would actually pay for something like this. But in reality, figuring out names for people did prove a highly thriving business. This makes more sense when the whole process is secure. PickyDomains now has a pretty long waiting list of ‘customers’ who wish to PAY for the ‘service’ of coming up with snappy brilliant domain names. According to recent reports, PickyDomains is about to hit 6 figures by the end of this year.
Doggles
It’s about creating goggles for the dogs and selling them online!? Yah… another weird and crazy sounding idea in our list! And would you think twice before calling it the dumbest one? There guys surely have a nerve to start a business like that and guess what! They’re millionaires now and running shops internationally.
LaserMonks
LaserMonks.com happens to be a renowned for-profit subsidiary of the Cistercian Abbey, which belongs to Our Lady of Spring Bank, the 8-monk monastery situated within the beautiful hills of the Monroe County – just ninety miles northwest of Madison. Man! Real monks really are refilling your cartridges! Would you believe that they ended up selling worth $2.5 million in 2005 alone?!
AntennaBalls
Can you sell simple antenna balls in the internet? Give me a break! That’s weird! But that’s just what a guy called Jason Wall has done. He’s one of the lucky dudes who became millionaires with their weird sounding online business.
FitDeck
Create a nice deck of small cards that features exercise routines. Then sell those online for 18.95 bucks per card! Sounds weird again huh! It’s fairly safe to call it a failure idea. But nothing tamed the ex-Navy SEAL and health instructor called Phil Black. This guy reported sales amounting $4.7 million last year. Man! Does that beat the military pay scale or what!
Designer Diaper Bags
Christie Rein was among the ones tired of lugging diapers around inside her freezer bag. This mid-thirty mom had 3 children and found herself always stuffing heaps of diapers in the freezer bags for the infant son, so they don’t get scrunched up inside her purse. This mom tried to find something compact, sleek and chic.
So she, along with her husband designed a custom diaper bag large enough for holding wipes, together with 2 to 4 diapers. They have over 180,000 bucks in yearly sales. Their Christie’s company is available online and currently runs 120 boutiques all over the globe!