Tips for starting a small business on the right foot
Getting a small business going and keeping it operational requires a great deal of planning and effort. With some key strategies in place, these processes can be made easier. Here are some small business tips that can be your keys to success.
Save money before you start
Loans from friends, banks or the Small Business Association are one thing, but doing it yourself is satisfying. As it can take months before your new small business begins to turn a profit, a lineup of unhappy creditors can perhaps be avoided and your small business credit can be maintained. Home equity loans and credit cards are a painful way to repay business installment loans, so try to do it yourself. Once things start going your way, bank the profits back into your business.
Begin with a small seed
Don’t rent too large a space or hire too many people before it’s necessary. It will cut into whatever profits you do manage to procure.
Cover your assets
As your own boss, you are liable for all debts and judgments incurred by the business. It pays to protect yourself by buying liability insurance and forming a corporation or limited liability company (LLC) so that your personal assets aren’t in play if things go bad. Also, make sure to pay your bills and taxes on time.
Have a clear business plan
Your business plan should clearly define in just a few sentences how the business will generate profit. Know your costs, from buying inventory to paying rent, salaries and more. Then you’ll know how much business you’ll have to do each month to cover – although you’ll no doubt want to do better.
Due diligence research keeps you up to speed with the competition and opens doors for innovation in your field. Also, protect your trade secrets – customer lists, survey methods, marketing strategies, et al – under the law through non-disclosure/non-compete agreements, computer encryption technology and confidentiality policies. When bad things happen, come up with a plan immediately, rather than allowing trouble to fester.
Put all contracts and transactions in writing
While not all transactions are legally required to be documented in writing – such as lease and storage agreements and offers of employment – it’s a good habit to get into. Regarding contracts, those that last longer than a year, involve sales worth $500 or more or transfer ownership of copyrights or real estate must be documented, writes Yahoo! Small Business.
Hire good, legal people
Take the time to hire the best, most enthusiastic employees, and treat them fairly. You’ll get value for your money, and they’ll believe that your business is worthy of respect. Customers will notice the difference and tell a friend. Plus, remain abreast of all IRS requirements for small business, including legal requirements for having at-will employees.