After being in business for a year or more, it is not uncommon for business owners to wish they had started something or done something differently on their first day of business. Buying a business that is doing well helps to eliminate regrets, but writing a good business plan and following it is the one thing that business owners wish they had taken the time and effort to do before taking over the ownership of a business.
Having a plan to follow helps eliminate the need to make hasty decisions. Advertising is one area in which it is easy to overspend. Because you are a new owner, everyone will try to convince you to advertise. Radio and television will look attractive when the presentation is made, along with newspaper ads. If you don’t have a budget for advertising, it is easy to be persuaded with the sales pitches. You soon realize that you have spent more than you budgeted and find the advertising has not increased your sales as predicted by the individual media outlets. When new business owners think of marketing their businesses, they tend to think of paid advertising. While that is part of marketing, there are other ways to get information about your business out to the public and your prospective customers. Becoming active in your community and participating in activities that help your community can sometimes get more business for you than paid advertising. Networking and listening to your customers are vitally important for a successful business. A business needs a website from day one and also a presence on social media. It is very important to include these in your marketing budget.
Pricing is important, as everyone likes to get a fair product or service for the amount paid. One of the advantages of buying a business that is doing well is the pricing that, along with many other things, is given to you so you can continue to make the business successful. Suppliers also usually give you pricing guidelines, so there is help for you in that area. Some products and services have high markups, while others are rather low. An example is perfume. We don’t buy perfume in gallon jars at an inexpensive price. We buy small bottles for an expensive price. While perfumes smell differently on different women, we think the small bottles that are expensive make us smell better. Are we conditioned to believing that, or is that really true? Most of us will continue to buy the small expensive bottles and would never consider buying a large cheap bottle. Lowering the price of a product doesn’t always increase sales. Price correctly, not too low or too high. You must know your costs and your break-even point, as selling more items might not increase profits if you are selling at a loss.
As mentioned earlier, having a plan to follow helps with decision making. We can’t, however, always know what decisions we will be required to make each day. Problems will occur and decisions will have to be made that were not in our plans. Every business has hectic decisions arise when there never seems to be enough time to accomplish everything. When this happens, it is important to remember to prioritize decisions. Work on things that are the most important and put off the others. Even though you think it is important to take care of everything immediately, you simply do the best you can.
A large number of new business owners have no experience with the paperwork of the business. They are usually familiar with the operation of the business and are excited about what they want to accomplish, but the books are a complete mystery. It is important to have a good accountant to help you set up your books. Depending on your bookkeeping knowledge, you can determine how much help you will need after the initial guidance. You may decide to hire a bookkeeper to work in your office and do everything except the income tax returns. It is good for you to learn about every aspect of the business, but you do not have to become an expert. Take time to learn and remember a good business owner is successful when he/she hires smart people to work for him/her.
One more thought is don’t try to expand too fast. It is best to walk into the business you purchased and continue to operate as it has been operating. It’s good to have new ideas and plans, but do what you do well and slowly make the wanted changes.
