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Saturday, November 7, 2015

My Five Rules In Beating The Odds For Success In Business

Robert Burns said it eloquently "The best-laid plans of mice and men often go awry". Business is more than just being smart but lucky as well. However skills and planning can definitely help in making the odds more in your favor. The most important part is that it takes money to make money. Unless you're independently wealthy, then start-up and working capital is a must. If you begin a business venture with not enough capital taking a shot you're doomed from the start.

Where ever you do receive capital from most times they need to be paid back. Generally that payment is incorporated into your operating costs, which uses revenues and percentages to show profit. Make sure your estimated monthly sales are as accurate as possible, and I would suggest reducing them by ten to twenty percent. This way you'll know in slower times that at least the fixed expenses will be covered. Here's a hypothetical example, you open a restaurant in a great location, and two weeks later the city starts doing road work making the street none accessible for like a month or two. Very little business comes in but you're on the hook for expenses regardless. If you don't in advance ensure enough working capital, and overestimate sales then you be out of business in a heartbeat. Rule number one in beating the odds, be aware of your business financials!

I've honestly met the worst business people in the world, unorganized, not focused, lazy, terrible with numbers, and extremely successful, how does that happen? Most know inside they're not the sharpest pencils in the box, so they counter that with hiring exceptional people to make them look good. As a result through the staff's hard work in spite of the owner's defiance's the business grows. Rule number two in beating the odds, hire those who might be more skilled than you in certain areas, and most important let them fly!

Make sure the product or service is competitive within your market place. In today's world with the economy so poor more people are purchasing on price than quality. It is vital that you study your demographic, the competitions pricing prior to making a business investment. Rule number three in beating the odds, the money is made in the buying not the selling!

Set a budget for marketing and advertising building a loyal customer base, and make a plan of action that will entice people to check-out your products or services. In developing a brand one must figure-out what will make them stick-out with customers feeling they need to be there. Rule number four in beating the odds, set a better mouse trap!

My final one is never put yourself in personal financial jeopardy when going into business. Make sure to incorporate your business so you're not personally liable if things should go south. Going bankrupt with an incorporation allows you to walk away not in a moral way, but a business one on clear and free. If you sign personally have no choice but to go bankrupt they'll take everything cars, house, any personal asset of value. Rule number five in beating the odds, always cover your butt!

Is using the five rules above going to guarantee your success definitely not! There are too many variables in a business situation, but having a calculated risk will help you make the odds more in your favor. Just keep in mind business is 50% skill and 50% luck, are you willing to play those odds?

By Arnold Nadler

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