Does common sense apply to business.
As a young teenager working part-time in a licenced grocer I was trying to figure out how to do something when one of the senior guys said to me to ‘use my common sense’.
I still remember the jolt I got when he said it.
He meant for me to think about what I was doing and work things out for myself. And really, that meant the simple day to day things that shouldn’t be too hard to figure out. Where something is as complex as a business, where many things are happening together, over different times and conditions, it pays to take in a larger view of what is going on, rather than just rely on common sense.
Does common sense apply to business?
You would think the simplest part about running a small business is choosing a product to sell and whether to make or buy it.
Then how best to sell it.
Money and future cash flows and risk makes up part of the decision making.
Where does common sense come into it?
The arithmetic is simple to start with, not complicated.
Then the decisions you make about your business:
- the products to sell and whether to make or buy them
- the price you charge for them and subsequent margins, which then provides the money for
- selling the product, including the marketing and selling
Common sense tells you that if you don’t have enough money something is wrong. And that you need to do something about it.
Get help before you really need it
How business works
How to understand how your business works – I work with a lot of business owners who are really good at what they do, can charge the right amount, but aren’t always clear on the next steps to take. Understanding how their business works puts them in a better position to make better decisions about their business.
How to market your business in the context of their business and what has been happening, the sort of customers you want and need, the product mix and how best to promote and sell them.
Pricing & Cash Flows
How much to charge, and how many products you need to sell to pay the bills – the insurances, rent and all the rest. A clearer picture of what is happening with cash in the business and where it goes. And where it should be going.
See things more clearly
So, common sense can be helpful, but in itself is only part and parcel of running a successful business. While your gut feelings will tell you things, you probably alos have a lot of information about your business, that together with your instincts and experience can be used to make better decisions. Sometimes it pays to get an outside opinion to help you with this and to map out the pathway you will want to take to ensure that your business not only survives and grows, but thrives.