If you own a business, maybe you feel like it’s a dream come true. Perhaps you had a vision, and you made it a reality. You went from having an idea to owning a brick-and-mortar store that sells your wares. Perhaps you have an eCommerce business model instead.
You must follow certain rules as a business owner. For instance, business owners must typically carry worker’s comp insurance. They must follow various safety rules regulatory bodies have in place as well.
If you’re going to make your business financially successful, you must follow some general rules. We will talk about them in the following article.
Make a Product or Offer a Service That People Want
Let’s start with a really obvious rule. If you want your business to make money, then you need to offer a product or a service that people want, if not multiple products or services that the public wants.
If you come up with a product or service idea, and you start to offer it, then you should find out very quickly whether people want it. You can come up with an ideal customer profile and try to market your product or service on platforms where these potential customers or clients will see it.
If they see your products and services, and they do not respond how you want, then that pretty much automatically means your business can’t turn a profit. You may need to brainstorm and come up with a way to make your services or products more attractive and desirable. If you can’t do that quickly, then the business will probably have to fold.
Maintain a Good Relationship with the Public
You also need to have a good relationship with the public. The public, in a general sense, makes up your customer base. Maybe not all of them want your products and services. That’s fine. No company makes a product or a service that everyone wants.
You need to at least maintain an amiable relationship with the consumers who might purchase your products and services, though, if you want to make any money. You may do that by establishing a brand identity.
You can do that in several ways. You might come up with a marketing campaign that your potential customers or clients like.
You might reach out to them directly via various social media platforms. You can devise TV commercials or radio spots that make a meaningful connection.
If you can’t maintain a fruitful relationship with the public, though, and if your potential clients or customers don’t like or trust you, then making money and keeping the business profitable becomes almost impossible.
Don’t Make Products or Offer Services That Might Harm Someone
You also need to avoid making products or offering services that might harm someone. If you make a product, or a line of products, then you need to test them very carefully. If you have an R and D department, that’s partially their job.
You will also have to get your products past various other regulatory agencies that will look them over and test them to make sure the public can safely use them. You need multiple lines of defense to make sure that nothing you make ever hurts someone or makes them ill.
Even with these lines of defense in place, though, products still come out sometimes that hurt people or make them sick. It is an imperfect system.
If you want to make a profit, though, you must do all you can to make your products safe. If a product you make hurts someone, or several people, then they can sue you. They might even bring a class action lawsuit against your company.
If that happens, then you may have to settle the lawsuit. You can also try to fight it, but that could mean having to pay even more money if the jury verdict goes against you.
Besides, if you make a product that hurts someone, and then you defy them in court, then that will destroy any public confidence that you’ve carefully constructed. You definitely can’t make any money that way. Even your most loyal fans will probably desert you.
Bring in More Money Than You Spend
This rule might also sound obvious, but you should still know about it and consider it every day. You can’t make a profit if you spend more money than you make.
Maybe you borrow money from a credit union or bank to get your company off the ground. Perhaps you have an angel investor or you get some funds from a venture capital firm.
No matter how you get the cash to start your company, if you spend more money developing and marketing your products than you bring in by selling them, then you’re operating in the red. That means you’re not profitable. You might get along that way for a little while, but too many quarters like that will bankrupt your company.
Only Hire Competent Individuals
You also can’t usually make money as a company if you don’t hire individuals who do well at their positions. No two companies will need exactly the same employees with identical skill sets, since various business entities make or offer different products or services.
However, all companies have something in common. Without a talented staff that can accomplish everything your business model requires, you can almost never make a profit.
That means going through a very careful hiring process. You will need to look at the qualifications of each employee you bring in, especially in the early going.
Later, if your company makes a profit and grows, then you can let someone else do some of the hiring if you trust them enough. You might give a hiring manager some power if you find that you’ve reached a point where you must occupy your time as owner or CEO differently.
If you follow all these rules, then your company can probably become profitable.
