Running a small business is not necessarily as easy as it looks. Can anyone do it? Maybe. But discipline and continuous learning will be key to running a small business effectively. The following 7 helpful hints should help to guide you as you initiate this exciting but sometimes daunting undertaking of starting a business.
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Create a Business Plan. While no plan is likely to account for every possibility, why not make your biggest errors on paper rather than in your business? Even if you create a less detailed plan, it may still help you get closer to your mark than not planning at all. Problems identified and remedied on paper and never making it to your business can save you a tremendous amount of time and money. No sense "flying by the seat of your pants" when you can effectively plan for your business' future! Further, the business planning process may not be as grueling as you think if you have the proper resources in place.
Implement a Team Approach. Even if you are essentially a one-person operation, you can still have a team approach to your business. For instance, do you view your advisors or bankers as part of your team? What about other stakeholders in your business?
Ensure Effective Administrative and Operational Management. Managing the daily operations of a business can be very difficult, particularly for persons who may not have had formal business training or who lack strong organizational skills and discipline. How will you maintain your employee records, tax records, financial records, administrative files, operational information? How will you use these and other management reports to manage the business?
Create an Effective Marketing Plan. How should you be connecting with your customers? Do you have a marketing plan or just a sales team? Is your brand what you want it to be? If not, how do you change it?
Ensure Effective Financial Management. Do you know what money is coming in and going out of your business, and from whom? Do you really know if you are making money or not? How much should you be reinvesting in the business? Many business owners are surprised when they see the actual financial information detailing their profitability or lack of profitability of their business.
Proactively Plan and Comply with Income Taxes. Whether you ignore income taxes or not, they will not ignore you. Failing to comply with federal and state income tax requirements can be a very costly practice. However, proper tax planning frequently can save you money. Tax planning starts before you begin business and continues as your business matures.
Listen to Sound Business Advice. One of the greatest attributes of a great entrepreneur is sound judgment. A wise entrepreneur will seek out and accept the sound counsel of his or her advisors or other key persons. Of course, the need to listen to advisors assumes you have chosen your team wisely, and have a strong functional team. Once chosen, the essence of a functional team is that each member contributes to the business in unique ways that add value to the business. If you have Michael Jordan on your team, but you never use him in the game properly, one may validly ask why he is there.
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