Finance tips for Small Business
Being an entrepreneur can be a stressful and challenging endeavor but also incredibly exciting and rewarding. There is no end to the many financial, legal, staffing, marketing, and customer issues that will come up as you launch your business.
Small business continues to grow, with companies under 500 employees adding over 1 million new jobs (more new jobs than large businesses) and companies with less than 50 employees showing the largest growth, contributing to about 40% of new jobs, according to the Bureau of Labor Statistics.
The U.S. small business administration reports that there are almost 10 million women-owned businesses, boasting $1.4 trillion in annual income. So this is clearly a healthy and growing sector.
There is, however, a lot of conflicting advice out there for the aspiring entrepreneur. Hopefully the following tips will help you navigate the journey of self-employment:
Monitor Your Finances
Reduce your debt, scrutinize your spending habits, and stay on top of your budget. Your income and expenses need to stay balanced to maintain a growing venture. Invest wisely, save your profits, and keep your overhead as low as possible. Learn to live on a frugal budget until your hard work pays off and you start to see bigger revenue streaming in to the company.
Hiring the wrong people is one of the biggest mistakes made by entrepreneurs. Employees and partners, collaborators etc., need to fit into the company culture you are trying to build. They need to be hard-working and flexible, as employees in startups often have to function in multiple roles.
Don’t just hire someone because they’re a friend, or because you seem to like them. You must do thorough reference checks on them. And make sure your offer letter says they are “at will” employees and can be terminated at any time. Don’t forget the old quote, “Hire slowly. Fire quickly.”
According to David Jensen, author of The Naked Interview, “Never rush into hiring a prospective candidate. Use diligence, not desperation. This means that while you probably needed to hire someone yesterday or months ago, you still need to hire carefully.”
Your contacts are a web of potential prosperity. Keep growing your list of people. Networking can land you a new investor, a great employee, a new customer, or a great mentor. Attend industry and startup events. LinkedIn can be a powerful tool to help you network, so make sure both you and your company have profiles on LinkedIn and that you are constantly adding new connections. When someone does a Google search on you, your LinkedIn profile will usually show up at the top of the search results, so be sure you’re making a good first impression.
No matter what else you are known for, be absolutely certain that no one could ever say anything bad about your services. Focus your efforts on providing top quality service that satisfies the needs of your customers and then some. You will want your early customers to be ambassadors for you, spreading the good word about your company, singing your praises, and giving many referrals. Thank your customers personally. Go the extra mile. It will pay off.
Get your business in order
You need a savvy business lawyer for your company, one who has regularly formed and advised many other entrepreneurs and who specializes in startups. An experienced startup lawyer can help you:
- Draw up contracts with any co-founders
- Prepare key agreements for the business
- Set up a stock option plan for employees
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