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Taking Control of Your Home Based Business
This section deals with the importance of being in full control of your business.
Loss of control can occur because of excessive debt, other parties owning shares of your company, and partners. These elements can drive you out of business.
Excessive Debt.
If you're incurring excessive debts, it doesn't matter if you have a good cash flow, a good marketing campaign, and business is booming.
If you don't reduce the debt it will catch up with you. Debt is a major restriction of freedom and hinders your ability to make decisions. You may be presented with a very good opportunity but won't be able to take advantage of it because of your debts. Don't allow debts to restrict your growth. Make a plan that will allow you to reduce and eliminate it.
The best way to reduce debt is by taking a percentage of your profits and applying that to the debt. Plan on making a monthly payment to reduce your debt.
Treat it you would all your other bills. Late payment of a bill will go against your credit rating. Come up with a figure that you are sure you can pay each month. If it's too high, you will end up spending the money elsewhere. If it's too low, it will take too long to pay off the debt. The figure you come up with must be realistic.
Exercise 1: Debt Reduction
Look at your accounts to determine how much debt your company is carrying. How much can you reasonably pay each month to reduce this debt? Make a detailed payment schedule below.
Partners
You may have had to take on partners in order to establish your business. There is nothing wrong with that, especially if everyone knows the boundaries and sticks to agreements. If someone else has a controlling interest in your business and it starts to boom, then buyers may pop out of nowhere. Unless you are in control, you could soon discover that your beloved enterprise is being sold and you won't be able to do anything about it.
Your main priority should be to have control of your business. Don't risk something happening to it after you have worked so hard to make it successful. Negotiate new terms with financial partners, but don't try to cheat anyone out of his or her share. The most qualified person should be in control.
Suppliers
Another controlling factor in your business is your suppliers. For example, your business is providing a hot item that has you operating 24 hours a day. Not an hour goes by without a continual flow of cash, all because of this product. Suddenly your supply runs out and your supplier, who is the only one that carries it, cuts you off and decides to supply your neighbor instead. What will you do now?
At this point you can't do much. To prevent such cases from happening make sure you have an alternative supplier that can supply with the essential you need to run your business.
Employees
An essential and controlling part of your business is your employees. To clarify the importance of an employees role in your business. Imagine a very unhappy employee feeling unappreciated. He decides he can do better with his own business. He gets a partner and opens a business just like yours, but before quitting he keeps working for you.
When a customer comes into your store he tells her confidentially to go to the other store (his) for better prices and a huge discount for new customers. All of the sudden sales plummet and you don't have a clue why. By the time you find out the reason, it's to late the damage has been done.
You must be aware of employee operations at all time. If you are running a large operation then you should get feedback from all levels of employees. Don't depend on the department heads or managers.
Keep going down the rank and get all the feedback about customer satisfaction, working conditions, ideas for improvement and their satisfaction. Not only will you have the important feedback but you're employee's will know you care about them as well as your business and they will appreciate that. Remove dangerous gaps between you and your employees. Keep them happy and working on your team.
Competition
One way to determine if your business has any weak areas is to act like a competitor that wants to put you out of business. This will help you to make a plan to quickly strike back if this nightmare becomes a reality. You won't want to just weaken the invader. You'll want to attack and destroy! For that you need a strategy.
Exercise 2: Competitors Outlook
List the things that a competitor could do to gain the complete market share and put you out of business.
What should you focus on in order to prevent the above?
The Market
Times change and so does the market. Sometimes we think the world will always be the same. When your children are small, you think they will never grow up and leave home. Then one day you wake up and they are adults with homes of their own. Market trends are like children. Stay on the alert for changes in the marketplace as well as changes in your industry.
There are many factors that impact your business. Become aware of all the conditions that your business requires for its survival. This awareness will allow you to take steps to eliminate as many dangerous conditions as possible.
Exercise 3: Identifying Threats
a. List all those conditions that could threaten the livelihood of your business.
b. Come up with some possible solutions to these threats.
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