The majority of the difficulties associated with establishing a business stem from failing to accomplish the small things correctly. The basics will lead you to the top, as any competent instructor has stated at some time.
If you’re thinking of starting a small business, make sure you follow these 10 small business rules:
1. You must keep track of your finances.
Lack of capital is the leading cause of small business failure. You must undertake proper financial planning and fully comprehend the business levers that might affect your cash flow.
Do you purchase stock?
- What amount of cash should you have on hand?
- Do you have a system in place to collect money from clients?
- How long do you have to wait for them to pay you?
- Do you have any loans that you need to repay?
- Do you rely on suppliers whose prices fluctuate according to market conditions?
2. You must create a data-driven culture.
The better your business decisions are, the more data you can track and utilize to make them. Business often necessitates certain “intuition feel” judgments, but it’s preferable to provide your instincts with as much knowledge as possible.
Tracking your company’s key performance indicators (KPIs) and understanding why they rise or fall may help you make decisions that will help you develop and stay on track.
3. You must participate in Lean Planning.
Rather than creating a long-written document that you utilize once and then file away, it’s critical to create a strategic and financial plan and track it on a frequent basis.
Planning is a continuous tool that should be used to understand the assumptions you have about your business and whether or not those assumptions are valid, or whether you need to make changes and adapt your assumptions.
60 percent of small companies in America fail due to a lack of cash, not a lack of profits—by utilizing Lean Planning, you can rapidly determine if you have made any financial assumptions that will have a negative impact on your cash. Maybe you assumed you’d get paid every 30 days on the dot.
By engaging in ongoing planning and then tracking the actual results of your business against your plans, you can quickly determine if you are getting paid every 45 days, and if so, you can increase your credit line quickly and appropriately, keeping your business cash healthy—before you get into trouble.
4. You must have a strategy in place for attracting and keeping top employees.
We are continuously on the lookout for top talent in our industry, therefore we make it a point to follow talent in our region on a regular basis and design outstanding retention programs and rewards.
Take some time to consider your company’s culture and what you want it to be, and make sure that culture is factored into your recruiting selections. We utilize LinkedIn on a daily basis to follow and acquire talent.
5. Every day, you must listen online.
Even if you just operate from 9 a.m. to 5 p.m. Monday through Friday, your business is “always on.” Every company should set up internet alerts to monitor what their customers are saying about them, their rivals, and the market in general.
Google Alerts is a fantastic (and free) tool for “listening” to what’s going on online. Be the first to know when a consumer leaves a negative review or when someone praises your company online. Use these methods to remain ahead of the conversation and capitalize on it. You need to get a business phone number too.
6. You must engage in marketing that generates a return on investment.
Small companies frequently tell us that they have no idea what marketing is. What should they spend their money on? Is it effective? Is it better to promote it on the radio or on the internet? Should they believe the Groupon or Comcast salesperson who tries to persuade them to distribute discounts to the general public or by local TV ads? What is it that works?
What does not work?
Small company operators should begin in venues that are both free and simple to access. Begin by forming relationships with local companies and company owners. Find out what it is that they do that is effective. Find out how visitors find your website and where they come from by using Google Analytics and your website.
Customers should be questioned about how they learned about you. And if you do decide to promote, make sure you know how to track it. Make a unique offer and keep track of it. Only provide one type of service or product. Repeat your successful marketing efforts after learning what works and what doesn’t. If you won’t be able to measure the results, don’t invest the money.
