Helpful tips for new business owners
New business owners almost always have a great challenge ahead of them. They not only need to get their business off the ground, but they need to make a good name for themselves so that customers keep coming and in so doing lead to the sustainable growth of their enterprise.
The tips below will help you tackle some of the main teething problems in your business and ensure it continues on a healthy growth path:
Be savvy with money as it may be several months before you start making a profit:
As a start-up, there may not be as many sales as you predicted and of the little money that you do make, most of it will go towards business expenses and paying back business loans.
Find an alternative source of income if it is needed to sustain the establishment stage: If you are running short of working capital and you do have the time, finding some part-time work to generate a bit more liquid isn’t the worst idea. In fact this income can cater for your personal needs, so that you don’t have to make drawings in the establishment stage of the business. This will ensure that your business’ profits go towards its growth, while ensuring that you do not starve.
Work from home if possible: This helps you save on rent and other expenses associated with running a business in separate premises.
Outsourcing and using part-time staff: You can outsource some services such as financial management and marketing, until you can afford to have a permanent employee. You can also hire staff on a part-time basis to save on human resource expenses initially.
Protect your personal assets: When you apply for a business loan, ideally use only your business’ assets as collateral so that if you fail to make payments, your personal property is protected.
Take out a business loan and not a personal loan: This is important for protecting your personal credit score. If your business fails to make payments or falls behind, it will be blacklisted and not you as an individual.
Have all agreements in writing: It may not be a legal requirement to always have written contracts between a business and other parties, but it is a very prudent idea. It makes it easier to monitor rights and obligations as well as prove your case if the contract is breached down the line.
Know how your business will make money:
You need to have a cash flow chart with information on expenses and projected sales. In addition, you need to know what strategy to put in place that will attract customers and have them coming back again. This information will help you to plan and budget accordingly.
It is important as a new business owner to be extremely smart with your money. A few simple but effective steps and careful financial management can help take much of the stress away from your personal and business life – ultimately enabling you to build a profitable and thriving enterprise.
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