Sunday, January 10, 2010

Small Business Owners: 7 Tips for YOU

No matter type of business you operate you've got to know how to
keep your business alive during economic recessions. Anytime the
cash flow in a business, large or small, starts to tighten up, the
money management of that business has to be run as a "tight ship."

(1) Pause Before Paying

Some of the things you can and should do include protecting
yourself from impulse expenditures. We've all bought merchandise or
services we really didn't need simply because we were in the mood,
then we sort of "wake up" a couple of days later and find that
we've committed hundreds of dollars of business funds for an item
or service that's not essential to the success of our own business,
when really pressing items had been waiting for those dollars.

(2) Using Professionals

While you may think you cannot afford it, be sure that you don't
"short-change" your self on professional services. This would apply
especially during a time of emergency. Anytime you commit yourself
and move ahead without completely investigating all the angles, and
preparing yourself for all the contingencies that may arise, you're
skating on thin ice. Regardless of the costs involved, it always
pays off in the long run to seek out the advice of experienced
professionals before embarking on a plan that could ruin you.

(3) Your Financials

Your company's books should reflect your way of thinking, and
whoever maintains them should generate information according to
your policies. Thus, you should hire an outside accountant or
accounting firm to figure your return on your investment, as well
as the turnover on your accounts receivable and inventory. Such an
audit or survey should focus in depth on any or every item within
your financial statement that merits special attention. In this
way, you'll probably uncover any potential financial problems
before they become readily apparent, and certainly before they
could get out of hand.

(4) Advisory Boards

Many smaller companies set up advisory boards of outside
professional people. These are sometimes known as Power Circles and
once in place, the business always benefits, especially in times of
short operating capital. Such an advisory board or power circle
should include a lawyer, a certified public accountant, civic club
leaders, owners or managers of businesses similar to yours, and
retired executives. Setting up such an advisory board of directors
is really quite easy, because most people you ask will be honoured
to serve.

Once your board is set up, you should meet about once a month and
present material for review. Each meeting should be a discussion of
your business problems and an input from your advisors relative to
possible solutions. These members of your board of advisors should
offer you advice as well as alternatives, and provide you with
objectivity. No formal decisions need to be made either at your
board meeting, or as a result of them, but you should be able to
gain a great deal from the suggestions you hear.

(5) Joining Associations

By all means, join your industry's local and national trade
associations. Most of these organizations have a wealth of
information available on everything from details on your
competitors to average industry sales figures, new products,
services, and trends. If you are given a membership certificate or
wall plaque, you should display these conspicuously on you office
wall. Customers like to see such "seals of approval" and feel
additional confidence in your business when they see them.

(6) Free Advice

Whenever you can, and as often as you need it, take advantage of
whatever free business counseling is available. Your local chamber
of commerce
or small business advisory will likely have numerous
free publications. Most local universities, and many private
organizations hold seminars at minimal cost, and often without
charge. Take advantage of the service s offered by your bank and
local library.

(7) Direction Is Everything

The important thing about running a small business is to know the
direction in which you're heading; to know on a day-to-day basis
your progress in that very direction; to be aware of what your
competitors are doing and to practice good money management at all
times. All this will prepare you to recognize potential problems
before they arise.

In order to survive with a small business, regardless of the
economic climate, it is essential to surround yourself with smart
people, and practice sound business management at all times.