Finding ways to nurture progress and growth.
Small businesses are often run by individuals – or minimal teams – and this can put a great deal of stress on those within the organisation. However, ensuring that you have great processes and practices in place at this stage in your business’ history will make it much easier for your enterprise to thrive and grow.
Tips for success
- Cash flow management is crucial. Poor cash flow management is one of the main reasons behind failure for many small businesses. If you’re not properly managing your cash flow then you run the risk of not having resources in the right place at the right time – i.e. running out of cash. You may have many other issues to contend with but, if you have mastered cash flow management, then your business is soundly structured.
- Be as lean as you possibly can. For a small business, costs can be critical. So, it’s important, especially when you’re starting out, to try to keep these as low as possible. It may be relatively easy to find a loan now with all the alternative loan options but you still have to pay back that borrowing. When it comes to fixed expenses, keep these to a minimum – for example, you don’t need to buy expensive office space when you’re just starting out.
- Hope for the best, prepare for the worst. Business is a very unpredictable world to occupy and a good half of all small businesses don’t make it through their first couple of years. It’s important to be optimistic and positive, to plan for growth and development – and also to create contingency and back up strategies just in case things don’t work out as you’d hoped.
- Track your income and outgoings. The balance between what you’re spending on the business and the income it has will be crucial to survival, especially in the first few years. So, track everything – especially expenses – so that you can see where spending is unnecessary or excessive and what costs your business the most. This will not only help with cash flow management but also give you control over your budget too.
- Grow your audience. Acquiring customers will be key to increasing profile, boosting profits and stimulating growth. So, when it comes to making decisions about where to direct limited resources, focusing on increasing the size of your market will always be a sensible move.
- Use financial goals and objectives. These should be reasonable, achievable and measurable. It’s fine to have in the back of your mind that you’re looking to build a high value business that you can one day take through an IPO. However, in the early stages of business goals need to be more achievable and strategic. How many customers do you aim to acquire this week/month/year? Which product lines do you want to launch in the next few months? What are your turnover goals for the year?
- Take some time out for you. If you’re a small business owner then the lines between business and personal life can quickly begun to blur. However, your business cannot thrive if you’re too exhausted and low to run it. So, make sure that you have some degree of work to life balance, learn how to delegate, pay yourself a salary as soon as you can and take a day off once in a while.