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Small Business Owners need to keep learning
A large factor that causes the failure of small business owners is the lack of business management skills. Most owners get into business because they are really good at what they do, usually creating a product or doing a service, so they start their own business.
Core Business skills are required
Regardless of what type of business you are, there are several core skills that owners must have to be successful.
o Sales Management
o Cash Flow Management
o Business development
These skills and knowledge are the basics required to get more customers into your business and grow in the first six months. If you don’t know how to do these business skills then it is even more important for you to get specialist help in these areas or your business will suffer.
Sales Management
Knowing the best way to get more customers buying your product requires skills in customer service, selling techniques, pricing options, buyers behaviour, and traditional value adding to get repeat customers. No matter what you are trying to sell you need to get formal training in sales techniques to ensure that you maximise the amount of your customers that will buy something when they contact you.
Cash Flow Management
Small business owners often live week to week on their cash flow budgets. This means you are at the customers mercy when trying to pay your bills on time. Learning how to make your cash flow even and consistent will save you endless hassles with your suppliers asking for payments and avoiding late payment fees which all add up as costs to your business.
Learn about different ways customers can pay you that will help protect your cash flow. Consider discounts for early cash payments for example. I am not referring to accounting training, but quite simply keeping track of your payments in are enough to cover your expenses out each month to prevent you overdrawing your account or losing your suppliers.
Business Development
Every year you will lose some of your best customers through no fault of your own. They will no longer need your product or have moved elsewhere. On average a business will lose 20% of their customers every year. What this means is that you not only have to generate new customers to grow your business each year, but you will also need to get 20% new customers every year just to keep the same level of business you have.
Most industry growth rates are 6% -12%. This means that you will have to develop:
o 6% new business growth just to stay competitive with your industry
o 20% new business to replace the customers you lost this year
o 5%-10% new business to try and gain market share from your competition
This means that every business owner needs to have strong skills in building customer databases and how to get new customers by using several advertising promotion strategies. Consider training in Business Development and Customer Relationship skills so you can build your market share each year.
© Copyright 2009 by Paul Baker
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