I’m frequently heard lamenting about small businesses that are not “run like a business”. What do I mean by that? In many years I’ve seen very successful businesses and I’ve seen the miserable failures too. Here is a list of traits of people and small business subjects that I think directly contribute to a businesses success.
Don’t just operate out of a checkbook. Just gauging the level of cash does not tell you much. You could be paying way too much for certain types of expenses and never realize it and your checkbook won’t tell you that. You must get feedback on the activity of your business in order to run it right. The presence or absence of cash alone tells you virtually nothing about whether your business is successful or is headed for disaster. By the time you notice cash dwindling, it could be too late. Cash could be building while you are missing opportunities. A check register is not a substitute for a P&L.
Have a real location. You can’t run a business from under a bridge or from a park bench. Customers and potential customers have to have some level of trust in you. You have to have a real presence. Having said that, if your business absolutely does not need a physical location, then you better have a kick-butt online presence. You are either serious or you are just playing.
Accounting we will go. You must have a proper accounting system so your business talks back to you. A proper accounting system tells you exactly what kind of income comes in and from where, and exactly what your expenses are and in what category they fall. It is the only way you will ever be able to tell if one part of your business is out of whack.
Don’t specialize in everything. Don’t be like the car repair place that says, “we specialize in all makes, foreign and domestic.” Huh? How can you specialize in everything? Do the opposite of this. It is tempting to want to include more lines of work to broaden your appeal but resist this temptation. Do the opposite. Specialize. Find a niche that only you do. Be the best damn one there is in that one thing.
Learn to market it right. Don’t just spend money, do the free stuff first. Employ the 3 feet rule. If someone gets within 3 feet of you, tell them about what you do. Be shameless. If you are reluctant to sell yourself, what does that say about you? Don’t you believe in yourself?
Keep business and personal expenses separate. Don’t mix it up. You have to keep things separate to know your true costs. If you’ve incorporated, your CPA will tell you to do this anyway.
Tune in tomorrow for more…