Managing Money: Four Ways to Ensure Your New Business Doesn't Go Broke

Even though we are emerging from the last economic slump, beginning a new business is still tough. Customer spending habits have changed and businesses must be prepared to keep pace. Fortunately, the basic principles of establishing a successful business remain the same. Here are four ways to help yourself get set up.

Become Part of the Market

Before becoming the star of the industry, you should expect to be a minor player. Familiarize yourself in your market and immerse yourself in it. A great way to gain a foothold is to locate the biggest players in your field and find out what services they fail to provide. Every company focuses on one or two niches and naturally misses out on some opportunities in closely related areas. Even the largest companies struggle to maximize the breadth of their offerings without compromising the depth of their quality. This is where you come in. Find out what services they could use and provide it for them. Show the larger companies how you can be an asset to them and find your footing within the market. It's a great foundation on which to build more exciting projects.

Focus on Your Sales

Capital is the first thing a small business needs. Often, small businesses try to perfect their brand or image before beginning cash transactions. Don't fall into this pitfall. Instead, be confident that your brand will nuance itself as the business progresses. In the meantime, start making sales. Find those leads that could make you money and follow up on them as soon as possible. When you locate clients, ask for up-front deposits on products or services to give yourself some security. Install monthly payment plans for repeat services. In other words, find ways to generate capital immediately.

Know the Figures

Successful businesses know exactly how successful they are. Keep detailed records of the assets you have and of upcoming expenses. This will make the twists and turns of daily business less surprising and prepare you for difficult sacrifices you will have to make eventually. Knowing the figures will give you realistic expectations along with some peace of mind. In addition, keep records of target revenues. Success is often slow to arrive and it can be frustrating to wait for it. Detailed goal setting can help you remember where you're headed and how fast you can expect to move forward.

Plan With a Grain of Salt

We all know what happens to the best-laid plans: they don't always work out. Despite your rigorous number crunching, your analyses and research, something could always happen to disrupt your business. Instead of panicking, see these times as an opportunity to grow. Re-evaluate often to make sure that you're finding and employing resources in the best manner. Remember that the ultimate goal is to optimize net profit and be aware that your long range or even short range planning may have to be altered, especially in the early days. Most important of all, be excited about your business. Be confident in what you offer and in the parameters you've set up for operating. The enthusiasm you bring in will make tough times bearable and good times even better.