Operating a small business is no small feat. Often times, there is more to it than you originally anticipated. From taxes to book keeping to hiring the right people, small business owners have to wear a lot of different hats. The tips below can help your business find success and, hopefully, relieve some of the hidden stress that often comes with owning a small business.
1. DO YOUR RESEARCH: You may know everything about making widgets, but there is always more to learn. Ask your self what your strengths and weaknesses are. Who are your competitors and what makes them successful? How has your product or service changed over the last five years? Will it change in the future? Talk to those who have been in the industry. Read trade magazines. Ask questions and seek out as much information as you can.
2. PUT THE RIGHT PEOPLE AROUND YOU: Every business owner should have a knowledgeable team in their bullpen that consists of a good accountant, banker and attorney. This group of advisers can help you with most any situation your business may encounter.
3. DON’T FORGET ABOUT TAXES: Understand your tax obligations and save for them throughout the year. Taxes are not something that can be swept under the rug. Smart planning will make your life much less stressful come tax season each year.
4. UNDERSTAND CASH FLOW: How will you get paid for what you do? Will you extend credit to customers? How will not having cash on hand impact your ability to conduct business? Having strong cash flow will allow your business to be flexible and handle change smoothly. Inspect your business to see how your operations and cash flow work mesh.
5. WHAT ARE YOUR FINANCING OPTIONS: Work with your advisers to understand all the options available to you. Additionally, look at your debts and determine if they are helping your business.
6. KEEP THOROUGH RECORDS: Keeping strong records not only helps you during tax season, they can also help you understand the granular details about your business. Detailed records regarding inventory, sales and purchases can allow you to see what products/services do well, which have better profits and where improvements can be made.
7. LIVE WITHIN YOUR MEANS: Pulling too much cash out of your business will hurt your business in several ways, namely by making it harder to secure loans as many lenders will look at your personal financial statements. That new fishing boat sure would be nice, but not if buying it means your business will drown.