Home
>
Small Business
>
A Small Business Must Have a Solid Foundation

A Small Business Must Have a Solid Foundation

We all know that a building has to have a strong foundation if it is to survive, so, too, a business.

There are many planks that support a business but there are four corner-posts that bear the most weight?

The four corner-posts are Marketing, Selling, Production and Financial Control. There are a multitude of other aspects which helps to make a business profitable. For example, customer service, adequate capital, and location.

But I can guarantee that if a firm is failing in any one of marketing, selling, production or financial control the business will fail.

And that's the chief difference between a small business and a big business. A big business has whole departments to oversee each of those functions and it has people who do nothing else but make decisions (manage).

You must carry out all four functions and manage at the same time.

Marketing

I have been counseling in small business for 30 years and still find people who do not know what marketing is.

At seminars I ask about their marketing and it almost certain one or more participants will say, "Well, we advertise in the local give-away newspaper". Advertising is not marketing. It's only a tool of marketing.

To use any marketing tool you must know who your target is and you must know what you're selling.

Your customer is not buying a drill. He is buying a hole! I do not know who first said this and it has been around for at least 40 years. It sounds simplistic and hackneyed but it is really a profound observation.

I don't think that girl is really buying a hole. She may be buying independence; the ability to hang pictures, put up curtain rods without having to rely on her male partner. The features and benefits which appeal to her will be different to those which influence a builder.

So if you are hazy on marketing you've got a lot of reading to do to get up to speed.

Selling

We all know what selling is?don't we? Well perhaps not, because most small businesses do it badly?or the owner does it but the staff has not been trained to do it.

"Do you want fries with that?" has been made famous by a well known take-away. We call that up-selling .It was a very successful tactic which increased sales of fries etc. but it is starting to lose its edge.

Several times on recent visits I have been asked whether I wanted fries when I already had fries, or did I want desserts when I already had them. That gives negative vibes. They are not really thinking of helping me. They are just trying to increase sales.

Production

This applies to both manufacturing and retail establishments. You have to 'produce' your product but you must do more than that. It must be produced at the location, at the quality, at the time and at the price that your customer wants.

A restaurant had their production down to a science but the waiting time between sitting and having the order taken was 45 minutes. I would have left long before. I am never that hungry. They are now out of business.

A kitchen renovator had a unique quality product and used an excellent installer. His price was very low compared to others in the area. They are now out if business.

You can produce low quality items at a low price and a high quality product at a high price, but you will lose your shirt if you try to sell low quality products at a high price or high quality items at a low price.

Financial Control

For some reason this is the area in which most small businesses fail.

One reason is that bookkeeping is a skill that can be easily learned (especially with all the accounting packages available). Accounting, however, is a discipline that requires 3 to 5 years of study and a lifetime of learning.

Yet the small business owner tries to do it all himself at the same time as all his other functions. Or he leaves it totally to his 'girl' who cannot do it either.

But the success for any task is reliant on the ability to measure every important aspect. In a restaurant we measure the value of wages against sales for the same period. Is your wages 45% of sales? That's too high. Let's work out how we can reduce it.

"We put 50% on our purchases to arrive at a price". That means your gross profit margin is 33% but your financials show that you are only achieving 29%. Let's do something about it.

A compromise for the small business owner is to have a professional accountant design an easily kept system that will produce the information required. Then your 'girl' can be trained how to operate the system.

Most Businesses Fail

Only about one in ten businesses do really well and makes some money for the owner. Your's won't be one of them unless you can get the four corner-posts right.

Author, Kelvyn Peters is one of Australia's longest serving Tax Agents. He was registered in 1962 and became a CPA in 1964.

Kelvyn served on many charitable boards including St Aubyns Hospital, Alzheimer's Association and Older Peoples Advocacy Service.

As a young man he won the Outstanding Jaycee Award three times. He's a compassionate, generous man who loves people. That's why he is so skilled at helping people in trouble.

Kelvyn Peters was Mayor of Kingaroy Shire Council from 1982 to 1987 and campaigned as the 'Young Man of Action'. Over 20 years later he still calls himself a 'Young Man of Action'.

He is a director of Restaurant Catering Qld Inc the peak employer body in Queensland, and has advised the hospitality industry for many years. His specialty is moving in to rescue a sick business. Kelvyn has spent over 20 years experimenting and researching methods to help small business.

He has perfected it with local clients. Now he is going global and he is only an email away.

http://www.profitstrategies4business.com

family-safe home cleaners Lincolnshire ..

In The News:

The Fox News AI Newsletter brings you the latest news on AI technology advancements and the challenges and opportunities AI presents now and for the future.

Texas family reunites with missing 11-year-old cat Grayson after 103 days using Petco Love Lost's AI photo matching technology and community help.

Tired of AI customer service loops? These insider tricks help you escape "frustration AI" and get real human help when you need it most for urgent issues.

Unlock richer audio from your streaming apps with simple tweaks to volume normalization, equalizer settings, and quality preferences for cleaner sound.

Scammers are sending fake Facebook settlement payout emails that mimic legitimate notices from the privacy settlement administrator to deceive users.

Holiday shopping scams surge as fake refund emails target distracted consumers during Black Friday and holiday seasons, costing Americans billions annually.

The AI-powered IRMO M1 exoskeleton features four modes, including turbo, eco, training and rest for hiking, running, cycling and sports with eight-hour battery life.

OpenAI announced upgrades for its ChatGPT Images platform on Tuesday, saying the program can now make more precise edits and produce images more quickly.

Chrome for Android now turns web articles into AI-powered podcast conversations. Get hands-free browsing with Google Gemini's natural audio summaries.

LastPass faces $1.6 million fine from U.K. regulators after 2022 data breach exposed 1.6 million users. Password manager failed proper security controls.

Petco disclosed a data breach exposing customer Social Security numbers, financial account details, and driver's license information due to a software error.

Baseball teams can now analyze complete swing mechanics in normal training environments using Theia's markerless AI system that processes standard high-speed footage.

Smart home hacking fears overblown? Expert reveals real cybersecurity risks and simple protection tips to keep your connected devices safe from hackers.

MIT develops needle-free glucose monitor using light technology. Revolutionary device could replace painful finger pricks for diabetes management.

The ClickFix campaign disguises malware as legitimate Windows updates, using steganography to hide shellcode in PNG files and bypass security detection systems.

Researchers from Osaka Metropolitan University designed a 21-foot dome that combines aquaculture and hydroponics to create a self-sustaining urban food system.

The Fox News AI Newsletter gives readers the latest AI technology advancements, covering the challenges and opportunities AI presents.

ChatGPT data breach exposes personal info of users through partner Mixpanel. OpenAI confirms names, emails compromised in security incident.

Android rolls out Emergency Live Video for 911 calls, letting dispatchers see real-time scenes during emergencies. Great for holiday travel safety.

Malicious Chrome and Edge extensions collected browsing history, keystrokes and personal data from millions of users before Google and Microsoft removed them.

Google's new Call Reason feature lets Android users mark calls as urgent before dialing, displaying an urgent label to recipients using Phone by Google app.

Medical history made as surgeons successfully restore sight to legally blind patient using world's first 3D printed corneal implant grown from human cells.

Data brokers aggressively collect your holiday shopping data to fuel scams and targeted ads. Learn how to delete your digital profile before 2025 starts.

Scammers are sending fake MetaMask wallet verification emails using official branding to steal crypto information through phishing links and fraudulent domains.

Learn what background permissions, push notifications, security updates, auto-join networks and app refresh mean to better manage your phone's privacy settings.