10 Things Every Small Business Needs to Do
Most challenges in starting a business relate back to doing the little things right. Like any good coach has said: The fundamentals get you to the top.
If you are thinking of starting a small business, follow these ten important rules:
1. Manage your cash.
The number one reason small businesses go bankrupt is lack of cash, not lack of profits. You need to do good cash planning and understand the levers in your business that affect your cash.
Do you buy inventory?
How much should you have on hand?
Do you collect payments from clients?
How long does it take them to pay you?
Do you have loans to repay?
Do you depend on supplies that vary in price due to market conditions (fuel for instance)?
There are levers in your business that affect your cash position. You NEED to understand those levers.
2. Develop a data-based culture.
Track data and use it to make business decisions. Business requires some “gut feel” decisions, but it’s better to inform your gut with all available information.
Track key performance indicators (KPIs) for your business and understand why they go up or down. This will help you make decisions that grow your business and keep you on track.
3. Engage in Lean Planning.
Develop a strategic and financial plan and track it on a regular basis. Planning is an ongoing tool that helps you understand assumptions about your business. By engaging in ongoing planning and tracking, you can quickly figure out if your assumptions are correct and make necessary adjustments to keep your cash healthy.
LivePlan’s Dashboard is an easy-to-use planning and financial tracking tool that integrates with QuickBooks to make tracking easy and automated.
4. Understand your margins.
Know how individual products and services contribute to your bottom line. Don’t just focus on the overall profit, understand the profit margins of each product or service. This will help you identify areas that may be dragging down your profits.
5. Have a strategy for recruiting and retaining talent.
Regularly track talent and develop programs and benefits to retain it. Consider company culture and its incorporation into hiring decisions. LinkedIn is a useful tool for tracking and recruiting talent.
6. Listen online every day.
Set up alerts online to gauge what your market is saying about you, your competitors, and your market in general. Google Alerts is a great tool for “listening” online. Be the first to know when a customer gives you a bad review or raves about your business.
7. Engage in marketing that gives you ROI.
Start in places that are free and easy. Network with local businesses and owners, use your website and Google Analytics to learn how people find your site and track the results of your advertising efforts. Spend money only if you can measure the results.
8. Talk to your customers.
Regularly communicate with your customers. Find out what they like and don’t like about your business. Retail stores should talk to customers weekly or even daily. Online businesses can use surveys after checkout or send quick surveys to customers. Negative criticism may be hard to hear, but it can help improve your business.
9. Know your competitors.
Understand your direct and indirect competitors. Keep an eye on them, understand their marketing strategies, pricing, and more. Even if you don’t have direct competitors, you may have indirect ones. Position yourself effectively against all competitors.
10. Have a higher purpose: a mission.
Make your business more than just a machine for making money. Sales and profit goals are important, but employees work harder and are more loyal when they feel they are contributing to a greater mission. Customers also prefer businesses with ethics and passion. Having a higher purpose can create loyalty among both employees and customers.
By following these rules, you can improve your small business’s chances of success. Remember, the fundamentals get you to the top.
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
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