We all know that as a ‘new’ business owner, there is a huge learning curve, but what many may not realize is this learning curve never stops, it is ongoing throughout the life of your business.
Businesses have different phases… think of these like children… infant, toddler, child, teenager, adolescent and adult. Each phase requires its own unique focus and comes with its own unique challenges. However, there are 5 keys maintaining a successful business in every phase.
- Learn to give up control of certain aspects of your business.
Your business is your baby. We do not enjoy putting the ‘raising’ of our business in the hands of anyone other than ourselves. However, if you do not delegate tasks that do not REQUIRE your attention, then how will you keep growing? How can treat your toddler business the same as your infant business and it still mature?
It is important to not only learn how to delegate, but how to be okay with it and let certain things be out of your control while still under your supervision. This frees you up to do things that can help your business continue to mature.
- Don’t cut prices because business is slow.
Business is slow, you are worried about how the bills are going to be paid, you haven’t had a new sale or customer in weeks and you are starting to panic so you offer a ‘great deal’ to get new customers in the door. The problem with this is it has the opposite effect you are looking for. You end up with ‘bargain hunters’ and not lifelong customers.
- Create a budget and then use it.
Budgets are not set in stone, but they should be put in writing. They will change, you will go over in some categories and stay under in others, and that is normal. Without a budget though, how do you know if you are spending too much money in a certain area of your business? No matter how big or how small your business is, you should have an annual budget and review it quarterly to make adjustments as your see necessary.
- Reinvest in your business.
As entrepreneurs, sometimes we are so grateful to have any money coming in that we often forget that we need a cushion in our business for those slow times. No entrepreneur should ever take 100% of the profits from their business out of it, but rather should set a percentage that stays in the business to help it continue to grow. This alone causes more business to close their doors than anything else I have ever seen.
- Don’t be passive with your receivables that are overdue.
This is a huge cash flow killer. Sadly, as small businesses, most of us don’t have a solid late-payment penalty and collection system implemented. This is the number one reason, you tend to be the last vendor on your client’s list.
If you don’t have a policy in place, take some time and set clear policies including late payment penalties and collections policies. Then communicate this with your clients and implement it. If your customers know they are going to pay more if they are paying late, you are more likely to get paid on time increasing your positive cash flow.
If you keep these five key things in mind, you have a better chance of getting out of the child phase with your business and into the adult phase.
I also highly recommend every business owner have a professional team. This professional team should consist of a good business lawyer, a business coach, and a tax professional. If you have these three key people to help you throughout the process you are less likely to make costly mistakes and keep more money in your pocket throughout the course of your business.