Are you ready to be your own boss? If so, you are not alone. This is the number one reason people open their own business, followed closely by the desire to follow one’s passion. There are nearly 28 million small businesses in the United States, employing over 50% of the working population. Approximately 543,000 new businesses open each month, but of those only about half will survive 5 years. Many would-be entrepreneurs underestimate how many different hats they will be wearing. Here are just a few of the many responsibilities you will need to manage:
The current labor market is tight, making recruiting and retaining employees difficult. With a limited number of employees, having even one or two of them fall short of their responsibilities can cause a major disruption in business. To avoid this, don’t just “settle” because you have a spot to fill. This will lead to high employee turnover and create a negative environment. Consider creating relationships with local colleges to bring in new talent. A willingness to train a new graduate could be your chance to reach top talent before your competitors.
Promote a work culture that will attract the type of employee you want to keep. Work-life balance, team events, and volunteering are a few perks that will make your company stand out. It is also important that everyone understands the company’s vision and core values. Use strong leadership techniques that will build loyalty, encouraging and guiding your team in their own personal success. Take advantage of leadership seminars and training that will hone your skills.
A Gartner study showed that Millennials and Generation Z tend to patronize businesses that are environmentally conscious. Baby boomers have gone digital, but still respond to old school marketing tactics. Understanding the demographic makeup of your customers will increase the effectiveness of your marketing and sales campaigns.
Utilize your webpage and take advantage of social media outlets to build customer relationships and create loyalty. Show appreciation and ask for feedback when possible. Respond promptly to any problems or complaints.
It is unlikely that anyone opens up shop for the love of paperwork. First time business owners seldom anticipate the number of hours they will spend doing administrative tasks that seemingly have nothing to do with why they started their own business. Research available technologies that may streamline your business, saving both time and money. To make best use of your talents, prioritize and organize using lists, calendars, or whatever works for you. Also, look to delegate some responsibilities by trusting a dedicated employee to help with some of your tasks. Doing so not only frees you up for other things, but creates an environment where employees are trusted and valued.
Your Cash Flow
Lack of cash flow is one of the biggest reasons small businesses fail. Make sure you are keeping a close eye on the money coming in and going out. Many businesses can save money by taking a closer look at their spending habits. Understand where your break-even point lies.
Small businesses are greatly affected by the uncertainty of cash flow. When customers are slow to pay, there may not be enough money to pay expenses like rent, payroll, equipment, etc. Get paid faster by implementing online billing or mobile payment solutions. It is also a good idea to establish working capital to be available when needed. Accounts receivable financing, also known as factoring, turns your unpaid invoices into immediate cash. The available financing can go up or down based on your needs. This is a great option for seasonal businesses and staffing companies.
If you’re looking for additional information to get started, there are many resources available to entrepreneurs and small business owners.
- Small Business Administration – connects entrepreneurs with lenders and funding to help them plan, start and grow their business.
- Small Business Administration Community Groups – the SBA has regional and district offices that provide a variety of business resources and advice. Entrepreneurs can meet other business owners, learn about small business financing, take classes, or connect with new business opportunities.
- SCORE – the nation’s largest network of volunteer, expert business mentors, with more than 10,000 volunteers in 300 chapters.
- NFIB – the National Federation of Independent Business is the largest small business association in the U.S. It has offices in Washington, D.C., and all 50 state capitals.
- Entrepreneurs’ Organization – a global non-profit organization, whose stated mission is to “Engage leading entrepreneurs to learn and grow.”
It takes courage, perseverance, and good old-fashioned hard work to make a new business work. There’s a lot to think about, plan, and manage, but also a lot of resources. Good luck!