Starting a business is one of the most exciting things you can do. However, as a new network marketer, independent business owner, or product representative, you may not realize that the first year or two in business will be the most challenging. This is especially true if you have never built a business before or worked outside the home. To help you with your business development, here is some advice you can use to maximize your chances of business success.One thing that you need to understand as a new business owner is that you are responsible for your own success. The company will usually provide training to help you with your business development and your sponsor may offer some advice. At the end of the day, though, you are the one who has to take action to move your business in the direction that you want it to go. No matter what your sponsor tells you, all businesses require some type of active participation on your part.Business Development Tips for Your First YearGet Used to RejectionNo one likes to be rejected. As a small business owner, though, you might as well get used to it. Not everyone is going to be a match for the products you are selling or your business opportunity and you will run into a lot more people saying “No” than those who say “Yes”.Don’t get discouraged. Take each rejection as an opportunity to learn what didn’t work so you can refine your approach. Eventually, you will get to a point where you will be able to ferret out the best business associates and increase your conversions.Automate as Much of Your Business Development as You CanA big part of your small business success will depend on how well you handle your time. There are only so many workable hours in the day and you want to spend as much of that time on tasks that will make you money or help you grow your business. Look for ways to automate or outsource those chores you don’t have time to do. For example, you could hire a virtual assistant to help you with email or some of your marketing.Get TrainingPart of your business development strategy must include taking time to get training that will provide you with the knowledge you need to build a successful small business. A lot of business opportunities tout the fact that you don’t need to have prior business experience. While this is true, you must be willing to get the training required to bring you up to speed. Take advantage of what your company has to offer as well as books and seminars offered by business development experts.Track Your ProgressTracking is the key to determining what works in your business and what needs to be abandoned in favor of something more promising to your business development. This is particularly important if you are paying with time or money because you don’t want to waste either on stuff that isn’t getting results. While there are programs out there which will assist you in monitoring different aspects of your business, a simple Microsoft Excel Spreadsheet will generally work fine as well.Learn to Separate Fact from FictionWhen you announce to the world that are in business, you will get a lot of advice from everyone. Some of it will be good and some of it will be plain wrong. In addition to that, other people may try to sell you products and services aimed at helping your manage your business. It is important that you learn discernment and be able to separate fact from fiction. Otherwise, you will end up wasting time implementing bad advice or throwing good money at worthless products.Build a BrandThere are thousands of people in the commercial sphere selling all sorts of business opportunities. The only thing that will make you stand out from your competition is your branding. Not your company branding but your own personal branding. When you build a recognizable name for yourself, you will attract prospects to you rather than having to chase after them. Additionally, having a personal brand will make it easier to change business opportunities without being forced to start all over again.Train for IndependenceIt’s nice to have people helping you with your business development and providing advice or tools to assist you in achieving small business success. However, you are the epicenter of your business and you need to be able to stand on your own two feet. Network marketing is an industry that sees a lot of turnover. It is not uncommon for people to drop in and out of a business opportunity. Keep yourself and your business strong by cultivating as much independence as you possibly can.Focus on Long Term SuccessA lot of people in the network marketing industry try to sell you on the idea that you can achieve instant success with your business opportunity. Overnight success does happen but it is very rare. Usually, what looks like an overnight success is actually the result of years of hard work behind the scenes.It is best to focus on building a business for the long term. When you focus on attaining quick success, you will become easily frustrated because it won’t be happening fast enough for your tastes. Think of building your business as a marathon rather than a sprint. It may take awhile to reach the finish line but you will get there if you persist and persevere.Your first year in network marketing will be an exciting roller coaster ride full of ups and downs. However, if you stick with it, you will lay a solid foundation that will contribute greatly to your small business success.
Small business owners (like yours truly) are in a unique position. Not only are we the owner of a small business, very often we ARE the small business. Personal and professional are the same. The dividing line between where your business stops and your personal life starts is hard to find (if it can be found at all). This also means that personal “stuff” will filter into your business, and business “stuff” will filter into your private life. If you are the one and onlyin your business, and you’re feeling “off”, then your business is feeling “off” as well, that day. We’re all trying to pretend that we keep our small business and our private life separate, but I am definitely fooling myself if I say I can do that. How to deal with small business problems knowing this? Well, the key to running a successful small business AND have a prosperous and fulfilling personal life is knowing your core values in both your small business and your personal life. Core values are the biggest determiner of results in both your professional and personal life. The are the drivers for action, the answer to the question: “what is most important to you in your small business, and in your personal life”. Often, we come up with answers that depict the core values we would LOVE to see results of. Someone who does not have a successful business mentions “business success” as a core value. Someone who’s life is totally unfulfilled mentions “purpose” as a core value. There is nothing implicitly wrong with this, other than that the results in these people’s lives and businesses often are completely out of synch with the core value mentioned. Not always, but definitely often. Here is a truth: your current results will show you your current core values. They will tell you what is important to you, as these results are the product of your choices (read: core values). If you would love business success, but you really want to spend time with your family more than you want business success, then that’s probably your result: spending time with family over making a profit. If you would love to increase your clientele base in your business but dislike networking functions more, then that’s probably your result: you will stay home more than visit networking functions. How to solve small business problems using core values. So, the first step to change is to be honest with yourself, and identify what your current core values are, based on the results you are currently producing. Where do you put your priorities? Those results generally come easy; you will be motivated to take action in their direction, you will be comfortable with the steps towards the results and with the results themselves. I have to admit: if I look at marketing strategies for my own business, I choose writing articles over finding and meeting new prospects. So, guess where most of my current results in my business are? The second step is to identify what it is you truly want in your business AND in your life. Be clear about the desired results. Often, they are the direct opposite of what you do NOT want anymore, so that’s a good start. For example: “I don’t want to work 80 hours a week anymore”. Great, that was your result so far, so: what DO you want? “I don’t want to struggle in my business anymore”. If that’s what’s happening right now, what do you WANT to happen, and what core value does that represent? Again, be honest, and be clear. WHAT is it, in terms of core values, that you are doing that you do not want to be doing anymore, and what is the new core value result? If, in my case, I find that writing articles is not bringing me enough business, and change is necessary, what do I want? Well, more business, obviously (be specific on “more” as well), which would signify a core value of business success. The third step is to identify what you can do to change the results around towards the new core value. Pick a couple of steps, and implement. No, they may not be easy, as they will be outside your comfort zone, but in time they will become more acceptable, and results will start to change. In my case: if I want business success, and I know that networking is a good tool towards business success, then that is an action step I could implement. Taking that step long enough will change my results, and my future “current” results will then reflect my new core value! Seriously, this 1,2,3 step system is ironclad, and will work. Will you work it? Well, if it is important enough to you, you will (a core value!). If not, then there is obviously a core value at play that is even MORE important to you than change, and your results will show. Do the same exercise, and find out what THAT core value is, and apply the same process. Small business problems can be small business PROBLEMS. By using this technique you can, slowly but surely, turn them into SMALL business problems! To your business success!
Any business advisor will tell you the answer, but what’s happening in the real world?Here are a few examples:VATWhen Jeanne started her exercise class business, she decided after taking advice that she wouldn’t register for VAT. It makes sense. If you want to compete with everyone else then you can’t charge 20% higher prices to include VAT. But now she’s stuck. She can’t grow the business beyond the VAT threshold because she would have to increase her prices or take a significant reduction in margin. Now she’s contemplating setting up separate businesses to boost her earnings. It’s quickly going to get complicated – she can do without all the distraction of doubling the admin work.Five years in to running his hair salon, Scott takes a day off a week and shuts early some days just to limit his takings to keep them below the VAT threshold. But he’s living hand-to-mouth.Which came first in these two cases: tax strategy or business strategy? The payoff of course is that both businesses reduce their tax bill, but at what cost?I’m sure this isn’t what was intended when a VAT registration threshold was included in the VAT legislation created in 1973.Income TaxJohn runs a sole-tradership and draws money from the business as he needs it and, more importantly, when it’s available during the year. His accountant then finds the most tax efficient way at the year-end to distribute his drawings between salary, expenses and dividends. Cashflow is not managed proactively, so while John knows what’s in the bank he doesn’t keep track of every due payment or receipt so he sometimes draws too much and leaves the business short of cash. This regularly causes him to have sleepless nights.Norman runs a limited company and runs it the same way. He takes no salary as such and reinvests most of the profits into the business to fund growth. He restricts his drawings to pay as little tax as possible. He’s looking to exit the business in 3-5 years. Unfortunately, because he’s not taking any kind of salary, let alone a market rate salary, he has no idea how profitable the business truly is and is complicating things for himself when he eventually come to sell.Ken is looking to buy a new vehicle for his business, that he will use personally too, in order to reduce his tax bill. However, his tax savings are less than savings he’ll make obtaining a vehicle this way compared to some of the alternatives.Which came first in these cases – business strategy or tax strategy? Again, the payoff is a lower tax bill, but at what cost in terms of business growth and equity?These examples are not rare. Many micro-businesses and SMEs are operated in a way that minimises tax liabilities. Their business strategy is defined by their tax strategy. In the real world, it seems, tax strategy more often takes priority over business strategy.And in every case described it is stunting the growth potential of the business. That may be OK in some cases, where the owner doesn’t want to grow. However, where they do it is holding them back. In any case, all businesses should be looking to grow at least a little just to overcome the effects of inflation!So what’s the solution? Some say that the government should change the tax rules to benefit SMEs even more. Others might point out that accountants are well placed to help business owners put business strategy before tax strategy. However, both of these “solutions” abdicate responsibility. Governments will forever tinker with tax rules, shaving a bit here and adding a bit there. The overall result is added complexity, confusion and probably a ligher wallet. Tax advisers will prioritise minimising the tax bill because that’s their job and the tangible, immediate benefits show how good they are at it.The solution then is for business owners to recognise that a successful business should pay taxes. That a successful person contributes to society by paying taxes. And to be successful means developing and implementing a business strategy that will achieve their goals not minimise tax.With a business strategy in place, then a tax strategy can be applied to mimimise the tax liability of that strategy without strangling business growth.So how do you create a business strategy? There are books written on the subject, but here are the essentials:
Define what you want to achieve, or start with the end in mind as they say. I don’t believe anyone really starts out wanting to build a sub-£78,000 turnover business. Many settle for that, but few start with that ambition. Starting with the end in mind allows you to pre-think what the business needs to look like in terms of turnover, profits, headcount, infrastructure, etc.
Look at what’s already available in the market and come up with something different. That might be a different target market, or a different way of delivering what you offer. But to avoid competing on price (like Jeanne) you must have something different to offer your target market, not just a little better, or smaller, or bigger, or faster, or whiter, but completely different.
Figure out which people would want to buy that difference and why they would buy it – why should they care enough to part with their hard-earned cash?
Figure out how to tell people about it and how they can get hold of it most easily.
Then create a plan to help you understand how the cashflow will be generated to achieve your goal. Too few business plans are written to aid understanding of the specific steps involved in achieving a goal and the risks associated with those steps. Write yours with those two things in mind.
Follow the plan step by step and adapt it regularly as you gather real world data to support or otherwise your business idea.
Discuss with your tax advisor/accountant how to minimise the tax liability of the plan and impress upon them that changing the plan is not an option.
If you’re already in business, it’s not too late to figure out a more effective strategy to achieve your goals. The best time to start is today.