Specialist
Who in their right might would choose to start up a new business? Millions of us apparently!
As a small business owner there is a constant stream (sometimes a torrent) of tedious but important business tasks that detract from getting your "real" work done. Some would argue that those "tedious tasks" are the real work.
You will wear many hats, a Jack-of-all-Trades if you like, not getting to be master of any, never mind all. Task, time and financial management, personnel, client and service requirements, sales, marketing, communications, social media and IT - that's a lot of hats and there are many more.
Learn from those who came before you. There are volumes of articles out there about the pitfalls that can besiege a small business. Ultimately the fall into the following (non-exhaustive) categories:
Money Matters
Money does matter and money matters are the bane of any small company.
I am certainly no Malcolm Forbes or Warren Buffet and even I know that cash flow issues can cause havoc and financial planning is key. A detailed and brutally honest business plan, preparing for best and worst case scenarios can make all the difference.
Remember, money rarely comes in on time and there can be a significant delay between the time you perform your service or supply your product and when the cash hits your bank account. There will always be clients who are slow to pay, unexpected (usually larger than can be afforded) outgoings and outstanding bills that cannot be postponed.
How you manage your books and track your money is a major decision. There are various business accounting platforms out there that can help you to manage cash flow, create budgets, run reports, calculate VAT, automate bill payments, with online invoicing and reminders. Take the time to make the right decision for the right fit for you.
Bad Planning
As mentioned previously, an honest business plan is essential covering all the basics like sales, development, staffing, skills shortage, funding but what about premises, relevant legislation, regulation, location, contingency plans, market research, marketing, competitive analysis and dragons.
"I don't need one", I hear some of you mutter, "I know what I'm doing". If only to focus yourself and your goals, it is a worthwhile endeavour, and a must for most financial resources.
People Problems
Growing your company means recruiting people. Employing people means keeping them motivated, educated, safe and happy. There is a significant cost to hiring each and every team member; job descriptions, contracts, handbooks, qualifications, training, effective communication, remuneration, the list goes on. There is a reason there is a whole industry dedicated to it, it's hard!
What about founder dependence, if something happens to you today, can the business continue tomorrow?
Have you thought about co-founder conflict? It may have seemed like a great idea to go into business together but it's just not working out for a myriad of reasons; personality clashes, different work styles, incompatible skill sets. Be prepared, sign a "prenup".
Or ineffective management, either yours or a team members'? How are you going to deal with it?
Surround yourself with people who are right for you and your company, treat them right and they will do well by you.
Clients, Customers and Competitors
Courtesy of a quick Google search, up popped the following distinction between customer and client: Strictly defined, a customer is someone who buys goods or services from a store or business. The word "client" can also mean "customer," according to the American Heritage Dictionary, but it has a separate definition as someone who receives professional services.
Why put our all-important customer and clients in the same group as the competition? Because if you are not selling to them you can be sure your competitor is!
How did you come to your "price", I hope it wasn't thin air! Value your service / product according to your research and stick to it. A key point was made at a workshop I attended recently; I'm paraphrasing here, but if a potential client is looking to reduce your price it's not the price you need to change it's the client (or maybe the scope). Value your value so they do too.
Marketing, social media presence, sales, strategy, advertising all require budgeting and planning .Pick the methods best suited to your service / product market. If you aren't sure who or how, find someone who is. Money and time are easily wasted aiming at the wrong target audience using an incorrect method. Just because you have loads of likes, connections, contacts or followers does not mean that any of them will convert to a paying customer.
Keep up to date on who your competitors are, you may be the leader today, but take your eye off the ball and you won't be tomorrow.
Time Management
We have all done the courses, read the books, got the software. Whatever way works for you, use it to manage and plan (there's the p word again) your time. Some people have kept a food diary to find their bad habits, have you ever kept an accurate time log of your business day? Try it for a day or two and you will be surprised to find exactly where all the time goes. Don't forget to count the time spent on calls, Twitter, LinkedIn and Facebook too.
Taking it all on and working all hours of the day does not pay off. By all means work hard but working yourself into the ground is not the way to grow your business. It is understood that a new business owner works well over the standard 40-hour week, with weekends being non-existent but draw a line and keep to it.
Whether it be administration, accounting, web development, copy-writing or marketing, there are many people available to hire on an interim basis, either online or on site, as and when you require them. Finding a good freelancer, consultant, temp or contractor can be tough, and the good ones are not cheap but they are flexible saving you time and money in the long run and maybe even your sanity.
Having trusted advisers both accounting and legal is essential to your success, having one to hand who knows your business is better than looking for one at the 11th hour when you are dire straits. They are great at being objective and being able to see the bigger picture. Listen to your trusted advisers whomever they may be, you may not always like or want to hear what they have to say ... you don't always know best. Who was it who said "if you are the smartest person in the room, you are in the wrong room"?
It's tempting to try and do everything yourself (shall I call you Jack?) and it’s an easy bad habit to fall into. Delegation is key but not always easy, feasible or possible. Organisation is essential. As more and more time is spent on researching, procedures, legislation, regulation, administration and less time is spent on your business product or service. Taking the time at the beginning to plan your back office requirements and obligations and continuing to do so as you grow saves invaluable time and therefore money in the longer term.
And finally ... I haven't done a word count but I bet "plan" and all its variations would come out on top, and seems to me to be the main takeaway. Having a plan is one thing, following it another. Keep it alive and up to date and it will become a true asset.
Article supplied by Karen Draper, Business Administration Consultant