Running a small business is tough because the buck stops at you for absolutely everything. The difference between success and failure can be a fine line. A small mistake in the first two years can knock a small business owner for six whilst a large new customer can propel you very quickly to new horizons.
Small business owners need to deal with all aspects of the business from book keeping, marketing, innovation, distribution, finance and customers that refuse to pay. Large companies have a separate department for each of the above tasks.
If you make a mistake in your record keeping the Inland Revenue comes knocking on your door. They work on the rule that you have read all their pamphlets and do not class ignorance as a defence. What a bunch of losers!
Countless sleepless nights, arguments with bank managers, disputes with suppliers and angry customers can all lead to stress overload.
And this is just the start, especially if you have gone into business with a friend! Make sure that everything you have agreed on is in writing so that further down the road there are no disputes about what was agreed. Better still do not go into business with a friend!
The first couple of years are the hardest as most banks have very tough lending criteria for small businesses. Do not hesitate to change your bank manager or even your bank if you are not getting a sympathetic response. Not all banks are the same. Some even offer free banking for the first couple of years!
Having a good accountant who will not start billing you the second you call, can help a lot. If you have friend who also happens to be an accountant then this could prove invaluable. Do not be scared to change your accountant or lawyer at the start. Building the right relationships at the beginning is critical.
Another problem small business face is absenteeism. If one member of staff is of ill it can reduce the entire workforce by fifty percent! It’s a great idea to have someone you can rely on as a backup. Another great idea is to possibly take on two part timers rather than one employee. They can both act as back ups for each other.
It’s important that you plan your growth. Obviously we would all like to see really good growth but if a business grows too fast it can lead to disaster. In some cases you might have to rein it until cash flows allow for another spurt.
Factoring your debts – where a finance company pays you upfront 80% of any outstanding invoices and then does the job of chasing payments can really help here.
Never be afraid to change tracks if the something is not working. If you are selling products that are not making you money – change direction. If you have a customer who takes up too much time for very little profit – dump him. If you have a supplier who keeps letting you down – find a new one. If you have an obnoxious employee – find someone else now before you waste too much time training the wrong person.
Be creative and always on the lookout for that special idea, promotion material or something different to get your customers talking about you.
Once you have run your own company successfully and got used to making your own decisions, it can be very exhilarating & chances are that you will never work for someone again.