Starting a small business can come with a fair number of challenges, but actually starting the business is the easy part (yes, the easy part).
The hard part is finding ways for running a small business successfully. At this point, you might be feeling a little overwhelmed. But don’t panic. To help you keep your heart rate down, and to set you on the right path to creating a successful business, we have compiled this succinct list of top five tips for running a small business successfully, based on this article.
Create a formal business plan
This might be a bit of a no-brainer but many people don’t realise the full importance of a well thought out business plan. It’s one of the very first things that need to be in place for running a small business (and any business) successfully. Your business plan may need some extra information about the company, the goals you hope to achieve, why you think they are achievable and the plans in place for how you will achieve those goals. The article states: “Most successful small businesses will need to have a break-even analysis, a profit-loss forecast, and a cash-flow analysis. A cash-flow analysis is especially important since you could be selling your products like hotcakes, but if you won't be paid for six months, you could still run out of money and have to close your doors.” Here is some extra information on how to write a business plan.
Choose a strong team and be a formidable leader
When running a small business, some of the biggest decisions you will ever make is choosing who will work for you. And while they need to fit with the culture of the company and have the correct knowledge and skills, hiring the right people transcends what is on their CV. At the end of the day you want loyal, hard working, committed, innovative, visionary people who are motivated and above everything, really believe in the product. And to keep an incredible team, you need to be an exceptional and fair leader.
Managing people, and treating them fairly and knowing how they want to be treated is a skill, do what you can to learn this skill. Not sure where to start? Here are some phenomenal books that may just teach you a thing or two about business and people: Making Friends and Influencing People by Dale Carnegie, The Lean Startup by Eric Ries and The 4-Hour Workweek by Tim Ferriss.
Put the legalities in place
When running a small business you want to make sure that all the legal side of things are sorted out. First of all, the article suggests that you “consider forming a corporation or limited liability corporation (LLC). These business structures will shield owners from personal liability, but there are more rules and requirements associated with them” so that if anything does go wrong, your personal savings and assets are protected.
The second thing to consider is that contracts are for the most part the only really binding documents. As great as it would be to take other people's words for it with oral agreements, and while a handshake is a great physical way to close a deal, go the safe route with these things and get it all down in writing. And when necessary, for contracts, or even when it comes to any of your actual business laws and regulations, hire the professionals (and preferably before it’s too late or before you already find yourself in a tricky situation).
When you start running a small business, it can be very easy to become overly ambitious right at the beginning, wanting a massive staff to create things you have always dreamed of, and you may even be thinking of ways to expand. But don’t. It might seem counter-intuitive, but one of the best ways to grow, is to start small. Spend only what you have to and can initially to avoid massive debt down the road.
Running a small business, while it can be fulfilling, definitely comes with its fair share of challenges. Most industries these days can be deemed ‘competitive’, and because you are small, you need to do even more to make sure you stay ahead of the game. You want to make sure you have unique selling points — see how you can do things like no one else can, or come up with new and different products that you think will make waves, keep your trade secrets confidential, nip potential challenges in the bud before they are big challenges, and make sure that you just do things better than other companies, with quicker turnaround times or superior products. However you do it, it’s essential to remain competitive.
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