Small Business Startup
Starting Business Operations

(Date posted: May 19, 2009)

During this step in your small business startup, you begin business operations. This means to promote and sell your product, collect the sales proceeds, pay your bills, and carry on other routine business activities.

Before beginning this step, you should have completed all important startup requirements. The previous step shows you how to do this.

The desired result of this step is to begin business operations and start making sales.

Here are the topics:

Guidelines
Procedures
Example
Go, continue, or quit decision

After beginning business operations, you will be able to optimize your business in future steps.


IMPORTANT

Before using this information to start a business be sure to read the following notice: Disclaimer

Guidelines

This step is a shakedown cruise. It will either prove or disprove your ability to get customers, run the business, and make a profit.

Your advance planning and preparations should help you in this endeavor. Be prepared to make mistakes and correct them. This is part of business life.

If you encounter problems, you might want to review the following pages from other sections:

See the page on Failures to Avoid.

See the page on Solving Common Business Problems.

If all else fails, See Chapter 18: Resolve Any Problems in my free Magic Success Secrets ebook.

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Procedures

Following are some typical tasks that will have to be performed during this step.

NOTE: If you are starting a low-cost, low-risk type of business, review the Bootstrap Methods page in another section for ways to save on cash.

Start making sales and delivering products

Use the advertising ideas you previously developed to solicit customers. Refer to the Developing the Sales Program step if needed.

Start producing the product (goods, services, or information) to be sold to customers. Refer to the Being Able to Produce the Product step if needed.

Spend advertising money in chunks. Check out results before continuing with the same advertising method. Try different methods if your current advertising doesn't seem to be working. Focus on those advertising methods that produce the best returns.

Provide the agreed upon services to customers. Don’t make promises to customers that you can’t keep. (Also, it usually is wise to avoid customers that “just can’t be satisfied.”)

Take care of customer complaints promptly, honestly, and with courtesy. You need to keep your customers satisfied. Word of mouth from a satisfied customer is the best advertisement you could ever hope to get.

Use your accounting system

Use your computerized or hand-written accounting system to record transactions, and produce financial statements and other reports. Refer to the Setting up an Accounting System step if needed.

Review the accounting reports for failure to meet goals. Take any corrective actions needed. Be especially watchful of your cash flow and cash position. Do whatever it takes to maintain an adequate cash position.

Minimize costs and expenses

Be careful to keep costs and expenses under control. Refer to the Planning Costs and Expenses step if needed.

When you are first starting out in business, you must be frugal. The rule is start small, become profitable, and then expand your business. After you have a thriving business is the time to think about having a fancy office and paying yourself a good salary, not before.

Perform routine business operations

Use the designated people to perform routine business operations. Refer to the Designing Business Operations step if needed.

Operate the business from your home office. That's why you set it up. Make any changes needed to operate your business effectively.

Pay your production costs, sales expenses, and operating expenses.

Collect the sales price and any sales taxes that apply.

File all required governmental reports and pay any fees or taxes due.

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Example

This example was to be based on the activities expected for my own business operations, the sale of one or more e-books.

(Note: In the meantime, business conditions have nosedived worldwide. Thus I have decided not to hold back my best ideas for to use in the for-sale e-books. Instead this free website will get everything I have. However, at a later time I may be able to sell advertising blurbs of others.)

I haven't started business operations yet. Therefore, this example is just supposition on my part.

Making sales and delivering products

After I have written my first e-book on ways to have more money, I will convert it into a PDF document. Then I will use the facilities of my web hosting company, Site Build It!, to set up a sales page on my website. After customers make a purchase, they can download copies of the PDF document to their own computer.

This free website will be the main source of advertising for my e-book. This website establishes my expertise in this area.

Using my accounting system

I plan to purchase the QuickBooks Pro accounting program. I am used to learning how to operate new computer programs. So I should become proficient in this program in a week or so. Then I will be able to use it in my e-book business.

I will use a daily cash report and a monthly financial statement to monitor and control business operations.

Minimizing costs and expenses

My costs and expenses for this e-book business will be minimal. The main expense will be a monthly fee for the web hosting service. I might decide to spend money for an advertising campaign. But this is still up in the air. Right now, I am more concerned about providing information than getting rich.

In any event, I will only need a few sales each month to cover all my business expenses.

Performing routine business operations

After I have created the e-book and set up the sales page, the sales operation itself will be automated. Of course, I will have to file various reports to the Department of Revenue and Internal Revenue Service. After having prepared hundreds of these kinds of reports during my public accounting career, this will be a snap.

I won't have any employees, so there'll be no payroll tax reports to worry about.

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Go, continue, or quit decision

This decision concerns the small business you started in this step.

Once you have started a business, you normally want to spend time, effort, and some money in making it a success.

After you are making sales and feel comfortable in running your business, you may be ready for making improvements.

On the other hand, if you have operated your business for several months and aren't showing a suitable profit, you also may be ready for making improvements.

However, if you aren't happy with running a business, you may want to shut it down. (This especially applies if you are losing money and aren't willing to make any improvements.)

These are your choices:

  • Go on to the next step in your business venture.
  • Continue with existing business operations
  • Quit (shut the business down)

For a while, you might want to consider this decision at the end of every month. You would keep considering the decision until you have either gone on to the next step or shut the business down.

Go on to the Improving Customer Satisfaction step in your small business operation if you can answer "yes" to the following questions:

  • Have you started making sales?
  • Do you feel comfortable in running your business?
  • Are you ready to improve your business?

If you have answered "no" to any of the above questions, you should either continue with existing business operations, or shut the business down.

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