The world of business is evermore encroaching on our everyday lives. In every profession the effects of cutbacks, stalling profits and declining job prospects make many of us feel that we could do the job better ourselves. This is something I have been interested in very long time, having set up a small business at the age of 16. This article is a culmination of the research that I've done into business and used to reside as notes disorganised in a file.
Business does not exist without profit. If a business does not exist to make a profit, which you will take as a wage, then it is either a charity or a money pit - it is up to the you, the owner, to decide. Generating a profit may take several years and so many people work on their businesses whilst they continue in a part-time or full-time job. Profit is the most important thing to a business, and is the lifeblood of any enterprise that you take on.
Profits might be the number one fundamental of having a business, but having a plan comes very close second. Without a plan of how to monetise and generate a profit businesses are very likely to fail. The old saying of "if you build it, they will come", often no longer applies, if ever. Online businesses are very easy to create but are very difficult to advertise and generate enough traffic to do something useful with. Those with a conventional brick and mortar business may struggle less to advertise but there is a lot of competition and the Internet allows easy comparison of available products and services.
Having a business plan and focusing on points such as “what makes you unique?” can be important as even if you have to alter your plan, simply having one means that when the times get tough you know you are following a plan which lead you to deliver succeed in business. The business plan will also increase the chances of you of obtaining a loan and a business plan can sometimes help to even out any lack of experience you may have in launching a business by making you think it through.
Your customers are most important people in your business, before your staff in my opinion. Without customers there is no money coming back into your business and so any outlay to buy products or services will never be recouped. Before you start your business need to know that there will be a customer base willing to pay the price that you plan to charge for your product or service.
To work this out you need to do customer research, and by that I do not mean ask your biased friends and family. As lovely as they are they probably will not give you the answer that you need, but will provide you with encouragement and the answers that you want. Proper customer research is done by either “harassing” people in the street or by paying someone to do it. Either way I believe it is a worthwhile investment of time and money.
I hope you have found this article interesting and if you have any comments or suggestions please feel free to comment. What do you think are the fundamentals of business? Would you add or subtract any of the fundamental principles above?