So, you’ve finally decided to take the plunge. You’re heading out on your own and starting your own business. Congratulations, you’ve done what many of us can only dream of doing but it’s not all sunshine and daisies being an entrepreneur.
There will be plenty of hard work and many challenges along the way.
However, we’re here for you and having written extensively about the rigors of business ownership we’ve compiled a list of things every small business owner wished they knew.
So, turn on your laptops, put on a pot of coffee and join us as we take a look at some of the most important business tips you always wanted to know.
- Have a solid budget in place
Budgeting is one of the most important skills that you’ll never learn in school or college. More often than not, we’re thrust out into the world to fend for ourselves and along the way, hopefully you’ll pick up some useful skills.
Most of the time, new businesses often fail as a result of insufficient cash flows. From keeping the lights on to purchasing new supplies and paying employees, cash is the lifeblood of any organization.
New business owners often overlook the importance of having a properly planned budget in place. As a result, when unexpected expenses crop up, the business is nearly crippled by the shortage of cash.
Hence when starting out on your own, always have a budget ready in place alongside some cash in reserve for emergencies.
- Always keep on top of your receivables
In order for a business to be profitable, revenue flowing into the business needs to exceed operational expenses. Sounds simple doesn’t it?
Well, yes and no actually. Besides constantly increasing your business revenue, keeping track of your receivables i.e. payments owed to your business is also essential. In the rush to secure new clients, it can be easy to lose track of your receivables.
Consequently, more than one profitable business has gone under as a result of uncollected receivables. This is because business revenue only reflects the sales that have been made and not cash collected.
Stay on top of what’s being owed to you by investing in an accounting system that allows you to keep track of your accounts receivable. As your business grows, consider hiring a dedicated employee who will keep track of these accounts for you. Just like a betting expert keeps track of the Kentucky Derby odds, an accountant will keep track of your expenses and make sure you are not going bankrupt.
- Work with good suppliers
In any situation, your suppliers can either guarantee your business’s success or doom it to failure. Suppliers provide you with goods and/or services that are essential to keeping your business alive.
Never be afraid to make use of your 30-day credit term or ask for a discount on bulk orders and prompt payment. If cash flow problems arise, purchase order financing is a great option that will enable you to cover supplier costs.
While the amounts may be small, every cent saved goes towards making your business more profitable. Always remember that business is a two-way relationship and maintaining cordial relations with your supplier can be invaluable during the toughest times.
- Keep your costs low
In today’s hyper-competitive world, businesses need to be lean, mean, fighting machines which requires you to keep costs low and margins high.
If your business doesn’t require much face-to-face interactions with customers, forget the interior decorator, keep things utilitarian and neat.
Or keep costs even lower by giving your employees the option to work remotely. The amount you’ll be able to save on rental and utilities could make the difference between the life and death of your organization.
Educate employees on the benefits of keeping expenses low and reward them for cost-saving initiatives. Of course, all of this should not come at the expense of quality so exercise wisdom when cutting costs.
The life of an entrepreneur is a tough one and to get your business off the ground, there will be plenty of highs and lows along the way. But we plenty of hard work and perseverance, you’ll be able to make it.