To support myself through college, I quit my job as a flower girl outside the local supermarket and started my own flower-selling business. Relying on the advice of my former boss, I built a successful small business that I later sold for a profit when I graduated. Here are the three tenants that help my business flourish.
Get Close to the Source
For a small business to be successful the owner must discover its relevant trade secrets. There’s always that root source from which you can buy the best merchandise at the best wholesale or B2B (business to business) prices. Buy visiting farmers outside the city, I was able to establish a business contact with a flower grower who would deliver flowers in his van twice weekly at 4:00am to local flower stores. By buying from the source, I was able to get fresher stock at far lower prices. However, I was also forced to buy in far larger quantities. I decided to take the business risk and increase my flower selling venues. Since I was selling flowers door-to-door in my college town, I added another route and hired my sister to sell the extra flowers for a 30% cut of her sales.
Don’t Under-stock or Over-stock
As a small business owner with few venues for selling my stock, the temptation always existed to buy fewer flowers and reduce the amount of waste I had at the end of the day. Since my stock was perishable the temptation was all the greater. True to my former boss’ advice, however, I realized that customers do not like to buy unless they are offered a wide selection. This establishes a feeling of trust, as if the seller is well established in his business, someone who will be here tomorrow if they have a problem, someone who has succeeded through experience and will offer them a fair deal. Keeping careful log of my sales by dates helped me established a yardstick for estimating sales in relation to holidays and the changing seasons. I always preferred to err on the side of buying a little too much stock and selling it at a discount in the end, just to cover my costs.
Realistically Assess Your Business Intake NOT Profit
As a small business owner I found this advice the most crucial and difficult to embrace. Many business costs are hidden in running a small business, from rent to vehicle maintenance, electricity bills to maintenance supplies and wear and tear. Reducing the cost of the stock from the sum of all sales is tempting when you are trying to grow a small business; however this creates a mistakenly inflated perception of profit. To carefully assess the health of the business long-term, create a list of every single aspect involved in the running of the business. Place an exact or estimated yearly cost next to each item. Be sure to include items that have yet to present a cost, for example the service of the business vehicle, or the ordering of new business checks. Divide the sum by 12 months and add the figure to your stock cost whenever calculating your actual business profits.