Thursday, May 8, 2014

10 Surprising Keys to Success When Starting a Business


How do you succeed in business.  Often it is not the greatest idea, product or service but it is other factors that determine success.  Stop me if you have heard this one...We are going to serve better food and bigger portions at cheaper prices. Alcohol is recession resistant so we are going to buy that local bar that went out of business.  The business landscape is cluttered with the failure of great ideas and the success of ideas that make you go hummm. 

There is the guy that started selling burgers that weren't very good and made a fortune.  A pizza company offered OK pizza at premium prices and made a fortune.  The oldest and most profitable automobile manufacturer sells way way fewer cars than the "big boys" but has never filed bankruptcy and makes way way more money than the "big boys" and has the longest and richest history in the industry.  


In addition to a great idea and sometimes instead of a great idea; here are 10 things a business needs to succeed:


  1. Understand your market
  2. Understand what people value and charge for it
  3. Understand why your business is not just a commodity and charge for it
  4. Promote - Advertise - Create a Buzz
  5. Understand the biggest is not usually the most profitable or sustainable
  6. Serve a need
  7. Get great locations/web presence
  8. Price to succeed
  9. Have experience in your market
  10. Manage Cash-Flow

How it Works - Be Unique

To really succeed in business it helps to have a niche and not let egos get in the way. Domino's does not have the best pizza but you to pay for other things you value like consistency. convenience and fast delivery.  Mercedes Benz sells fewer cars and makes more profit.  They are in a high price low - volume market with great profit margins and they are not concerned with being the top seller in terms of number of cars instead they want the highest profits.  

Realize is actually much harder to succeed with a strategy of  positioning your business in a high volume - low price/margin market.  In that market the margin for error is razor thin.  So you might want to figure out how to make your product or service unique rather than a commodity.  Figure that out what people really value - provide it - charge for it - and success will be yours.

How it Works - Pricing

When it comes to pricing you really need to understand the value you provide and then price accordingly.  For example, I tell any potential clients that while I prepare tax returns the value I actually provide is inside conversations with them about business and success.  I charge them when I prepare their tax returns but they actually are paying me for the value of our conversations throughout the year.  So if someone just wants a tax return, a commodity, they are not a potential client for me.  Who just wants to pay for a tax return?

The CPA Superhero wants you to succeed. If you want the CPA Superhero to help you then feel free to contact me using my information below. New potential clients can have a free half hour initial consultation.  Tax planning for your retirement involves a consultation fee.


Jeff Haywood, CPA
The CPA Superhero
972-439-1955
jeff.jhtaxes@gmail.com

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These posts contain general information that does not fit every situation, they are not all inclusive, and as always for your tax situation everything "depends on facts and circumstances."  In addition, the world and IRS requirements are always subject to change.  So call me to talk about your specific facts and circumstances and what you want to accomplish.