Lack of proper saving culture

Many business owners have a poor saving culture. Every money they make in their business is consumed, and in most cases the money are spent on things that will not bring any increase to the business. Because they spend all the money of the business on things that are not in line with the mandates of the business, the business is sure to fail. Materials and other business consumables for the smooth running of the business cannot be bought because adequate provisions were not made for it.

The lack of proper saving culture among business men is a major factor to be highly discouraged if we must make meaningful progress in business. Working capital should always be made available if the business must survive. A business man that has no reserve cannot succeed in business, because when opportunities for his business advancement arrive he will not be able to quickly seize it. And in most cases where he is able to secure a loan to make good use of a profitable business opportunity, the interest rates and the amount he is expected to remit as an install mental payment of the loan facility will drain him of adequate liquidity to run the business.

I was passing through this dilemma before in my business. I make money but the moneys were going to settle my indebtedness. I was barely able to keep my business going. Many times I thought the business will fail, but suddenly God will create a way of escape for me and I will survive that stage. That was how I was struggling with my business, until I was able to develop a strong saving culture. I decided one day to keep part of what I made solely for the running of the business. I decided to pay my self and the business first before paying anybody. With this in place I was able to save enough to embark on other profitable business ideas.

If you want your business to succeed, part of what you earn is yours to keep. Part of what you keep should be invested so that it helps to labor vigorously for you and for your business. It is only in this shall you be able to save your business from failing.

Limiting business to one location

Limiting business to one location is a fundamental cause of business failure all over the world. Majority of business fails because the owners limited the business to their location only. They refuse to look at the other side of the road to see other potential market. When you limit your business to one location, you will only get patronage from that location only, but if your business is spread across many markets you will not only be a brand in the market place but you will generate more profit that will help keep your business floating even in the midst of economic downtown.

Take for example, if you have a business in one location that pulls in $500,000 monthly revenue and you decided to duplicate your self in five more strategic locations that equally generate $500,000 monthly revenue each, it will be more profitable because your customer base will increase. You will be able to locate potential customers whose patronage can help to catapult you to higher heights in your business endeavors. It is not the quantity of the customers you have that makes your business grows, but how many quality customers you have, and how you are able to convert them to loyal customers. And you cannot get a handful of quality customers if you remain in one location.

Now let us do a simple mathematics:

Numbers of business outfits:       6

Monthly Revenue:                      $500,000

Total monthly Revenue:              6x500, 000

Total Monthly Turnover   =        $3,000,000

With this monthly turnover, your business is now more profitable compared to monthly revenue of $500,000 from only one business location. More so, you are able to capture more markets, offer more products and services to your targeted market. This means you will meet with more potential customers whose patronage can help greatly in catapulting your business to higher heights. I want to re-emphasize a fundamental truth: It is not the quantity of customers you have that makes your business profitable, but it is the quality of loyal customers that patronizes your business that makes it profitable. A man with customer base of 1000 simple customers who only buys products of $20 once a month cannot be compared to a man who has 500 quality customer bases that make regular patronage of $500 trice a month. Where the former make only $20,000 monthly, the later makes huge sales of $750,000 monthly. That is the power of quality customers.

Therefore, a wise business owner will not limit his business to only one location. He will put in effort to spread his business across many potential markets in order to capture more quality customers. I have heard people say you can put all your business in one place and let the public know what you are doing and where you are located; they will find you. From experience, I have come to realize a fundamental truth that people tend to patronize the man whom they can easily access than the man whom they have to go through certain difficulties to locate. Why put your targeted market through pains and difficulty to do business with you when you can actually take your business to where they are and spare yourself the effort involved in paying huge sum of money to advertise your business. It is more profitable to take your business near the market that needs your products and services than to try to call and persuade them to come to you. Refusal to recognize and comply with the above truth is a fundamental reason of major importance why many businesses fails. And he who can avoid it would have taken a sure step in the right direction of building a solid foundation for the success of his business.

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