Eight Tips for Small Business Owners

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This month I have a guest blog from a writer at Nerdwallet. Since I have so many US readers I thought It might be nice for you to get a more local view of the issues surrounding Small Business. Having said that Angie provide some useful common sense advice that is valuable to any small business; especially those who are about to, or have just started as business owners.



"Let’s be honest, owning a small business nowadays is challenging. There are so many things to keep in mind, and as such, many variables to consider. It can get a bit flustering trying to sort out every piece of advice you hear. Let’s look at eight solid guidelines that should be staples of any small business owner’s, “things to remember” list.

1. Save up as much money as you can before starting.

One of the worst mistakes you can make is going into business with no capital saved up. Relying on loans from the bank, the SBA or friends is a great way to get you into debt. What some small business owners don’t realize is that it can take awhile for your business to start providing enough profit for you to pay the loan(s) back. If you business isn’t as profitable as expected your lender might just call in the loan, or you may have to pay it off with your credit card. Save enough to cover yourself for at least a year after you start your business.

2. Minimize costs.

Calculate out how much everything is going to cost you. Find how out how little you could possibly spend, and still be effective. Don’t rent out more space than you need, or hire more employees than you will need. You want to start small and keep your screw-ups small too. Give yourself time to learn and deduce the best way to go about things, before you shell out too much cash on this or that. It will save you money in the long run. 

3. Safeguard your personal assets.

You must understand that once you start a business, you are liable for all debts and judgments that it incurs. This can include any judgments from lawsuits against your business, taxes, loans, or money owed to renters. To protect yourself from having your personal assets seized, you will want to get business liability insurance. This alone will not cover you against everything however, and you may want to consider forming a limited liability company.

4. Know how your business will be making a profit

You are going to want to crunch the numbers, analyze the data, and come up with a figure of how much you will be making, how much of it will be going back into the business, and how much actual profit you will be earning. Don’t forget to factor in all the costs of running your business, and figure out how much product you will need to sell.

5. Find your competitive edge and use it

Not every small business is successful, the ones who are doing things that nobody else is, or doing them better than anybody else is, are the ones who make the profit. Whether it’s a special marketing technique, survey method, or manufacturing short cut, find something you can use that nobody else is. You either have to have higher quality than your competitors, or be smarter than them. Once you find this competitive edge, it’s important to guard it. Don’t let anybody find out your secret to success, because it won’t be a secret anymore.

6. Put everything in writing

Oral agreements or deals made over handshakes are not reliable nowadays and it’s wise to put everything important in writing. Make a habit of giving and getting receipts for everything. You will need many contracts written up for things including storage agreements, service contracts, and leases. Don’t be the guy in court without any paper evidence of your claims.

7. Acquire quality employees

Hire employees who are both enthusiastic and highly skilled at their job. An enthusiastic employee will make your business environment much more friendly and appealing to customers. You want your employees to represent your company well on and off the job, and this is more likely to happen if your business is respectable. Pay your employees well and treat them with respect, the result will be worth more than the effort.

8. Pay your taxes! 

As a business, you will be responsible for more than just your personal taxes. Especially important to pay on time are your payroll taxes. These can levy heavy fines if not paid on time. Stay up to date on everything you owe, and maybe even pay some bills early once in a while, it will pay off for your reputation.

Angie Picardo is a staff writer for NerdWallet. Her mission is to help consumers stay financially savvy, and save some money with the best online checking account."

Exigent Consulting provides specialist services for Managing High Growth, Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

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Are you Working for a Madman?

As the owner of a small business you are responsible for everything. You will have discovered by now that running a business is a lot more complicated than you first thought and producing your product is only a small part of running a business.

Typically businesses are started for two reasons firstly because the owner was made redundant  and secondly because the you thought you could do better than your current owner in making it, delivering it  or providing the service.

Now that you've started your new business you really start to get stuck in. You've got to find orders so you go out and sell, process the orders arrange to have you product and or service made and delivered. Next you've got to arrange to invoice for it the to make sure you get paid, chase debt, provide information to the authorities on profit and earnings; take on and manage staff (never easy), set manage and review the company strategy. To keep the company successful you must keep this cycle moving 

Pretty soon you're actively involved in all these areas, yes you've employed staff but they don't seem to have the drive or the enthusiasm to get it all done, so you cover.

You've had your business now for 2-3 years its bigger but your working harder and harder to keep on top of things, your get a reasonable salary but probably if you dare calculate it you are the lowest hourly paid in the company. You get less time off and your working weekends.

If this looks like you -  then you're working for a madman: and the madman is you!

So how do you bring back sanity?

Well the first thing to do is to find a way to change “insanity” as they say “is doing the same thing today as you did yesterday but expecting different results”

Change is what is required and it starts with you.

So the first thing to do is to put some clear structure down for your business and do some business planning. Next identify which functions you are best suited to best and give those your least able to do to others. Third get some structure and processes into your business, yes but you say I already have that. Then ask yourself can this process run smoothly without your intervention and is there a step by step guide. If the answer is no which I suspect it will be then you don't have a process.

Fourthly, work your way out of jobs, that is to say once you've got a structure and a process mapped out give that work and responsibility to someone else, your job is to manage them not do it for them.

Whilst this is straight forward it is not easy, the day to day problems caused by your lack of structure will not immediately go away but if you're persistent you'll see tremendous benefits.

Exigent Consulting specialises in providing Business Turnaround, Sales, Marketing and Mentoring to the Small and Medium Business. We help Business Owners improve the profit performance of their business.

Do you want a Business or a Job?

This may seem an odd sort of question to ask someone who’s looking to start up a new business but it is a very important question. This isn’t so much about working on the business or in the business as about understanding that a business has a life of its own and a job is about providing yourself with income. Businesses tend to start in two ways, either as a result of being made redundant or because you think you can do it better than your current employers. Now this is no bad thing and this burst of entrepreneurship is vital to get the business of the ground. However to really create a business rather than a job for yourself one needs to develop the business as a separate entity from you the new and proud owner.

The problem arises because this vision that you had when you started the business tens to quickly disappear in the day to day grind of running a business and because you focus on yourself to do it right you start to build a business around the way you think and do things. No harm in that you say, well actually there is because all processes are customised around you, and because you are often over-qualified for many of the tasks you perform you are doomed to expect your employees to do it as well and with the same level of commitment. You have made yourself indispensable because of course they won’t. In doing so you are killing your business and giving yourself a job instead.

So if you want a business you have to create it such that it is not reliant on you, it must have strong repeatable processes that can be understood and followed by your employees and cover every aspect of your business, that way you can concentrate on making the business work rather concentrating on what the business makes. On the other hand if you want a job......