Five Tips for managing your own business

Five Tips for managing your own business

March 22, 2022

Maybe you started your own firm on a leap of faith years ago. And knowing nothing about running a business when you began, you earned plenty of lessons along the way. Here are some "been–there–done–that advice" that might be helpful if you are running your own venture. Because actually running a business is something that no one ever teaches in school.

1. You wear a lot of hats

Being a startup founder means playing many different roles that you don't concern yourself with when you're on someone else's payroll. You need to learn the skills involved in various tasks to make your business work.

For example, let's say that you're a plumber, and a great one at that – but what do you know about marketing your business, pricing your services, ordering equipment and managing employees?

When you start a business, you have to find a suitable place to rent, and choose and buy office equipment at affordable prices. You have to learn to market the business, hire staff and train them. And you have to do all of these while not compromising the service the existing clients received.

2. Frugality is a virtue

Businesses fail for a lack of positive cash flow more than anything else. You can give yourself a big, fat advantage by cutting down your overhead.

All stuff costs money, and when you start a new business, money is something in short supply. This means you have to think shoestring – finding less expensive ways to do everything and letting go things you don't absolutely need.

3. Put things down in writing

Anytime you start a business, even if you're a sole proprietor, you are involved in all kinds of loose and informal partnerships. A bad relationship has the potential to sabotage your business. So choose wisely and sign formal agreements.

Maybe your colleagues and you went into the business as a partnership, but that always presents special challenges. These might not necessarily be people you would hang out with after work, but all should be individuals you feel you could trust and be comfortable with on a professional level. If you agreed on how to run a partnership in advance, then commit your agreement to writing.

Partnerships don't always work out, so you have to have written procedures on how to run the business, how to settle disputes, and if necessary, how to handle the departure of a partner. The same applies to your relationships with suppliers, vendors, contractors or even clients.

4. Focus on what brings in the cash

The biggest key to running virtually any business successfully is your ability to concentrate on the activities that bring in the most money.

This is particularly important for startups. Building cash flow has to be your top priority. That means you have to minimize the time spent on routine functions. You need to identify repetitious tasks from the very beginning, and streamline them immediately to maximize efficiency.

Maybe you hate doing paperwork and administrative tasks, so create a workflow that makes them as simple as possible. Some of the functions include accepting client checks, making bank deposits, opening new accounts and conducting annual reviews with existing clients.

5. Make sure you have some paying customers first

This may be the single best piece of advice you can receive. If you already have a client base, at least half of your business risk is gone. Having an established client base is huge.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article was prepared by FMeX.

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