I have learned what works to create successful businesses from my SCORE clients. Equally important I have learned what does not work.
1. All markets are not the same. If a product or service sells well in one market, that does not guarantee it will sell well in your market. The one exception may be Franchises. They prove successful in multiple markets and the Franchisor develops a model that is successful in other markets. I have had several clients who were not successful. For example, my wife and I mentored her niece who wanted to start a specialty casserole business in her market. We knew of two specialty casserole businesses that had succeeded in other markets. The niece’s casseroles did not sell well enough in her market to succeed and after trying different marketing strategies, she shut it down after 1.5 years. If there is no market, there is nothing the owner can do to create one.
2. The owner should never! Ever! Co-mingle personal money or family money with the business’s money. If they do, they never know how good or bad the business is doing, because the financial statements are wrong. If you do not accurately measure results, you never know what works and what does not work. Therefore, you cannot make your business more profitable. Create a business checking account and deposit all business revenue in it and pay all business expenses from it. If the owner pays themselves a salary, as they should, write themselves a salary check and deposit it in their personal checking account. When I review a client’s financial statements, I always look for family members drawing a salary, but not working in the business. If I collaborate with a client restaurant owner, I always ask if family members take free meals from the restaurant.
3. There are no guaranteed business successes. I have had numerous clients who were absolutely convinced customers would love their unique product or service as much as they did, and the new business would be an immediate guaranteed success. They operate on faith, not logic, and will not listen to any contrary facts. Rather than guaranteed success, which produces guaranteed failure.
4. Do not start a new business or own an existing business if you dislike marketing and sales. Marketing is what you do to get customers into your brick-and-mortar business or on your website and social media page for online businesses. Sales is what you do to make a sale once there. Owners can delegate the production and delivery of their product or service to employees. They cannot delegate marketing, sales, and financial management. They can hire outside marketing and sales experts to help, but the owner must personally oversee that task.