7 Tips Every Business Owner Needs To Know Now!

Oct 15, 2020
7 Tips Every Business Owner Needs To Know Now!

Who doesn't need business tips before starting a new business for the first time? Starting a business often comes with a steep learning curve, and it’s easy to make mistakes that can affect your company and its bottom line down the road.

Watch these business tips!

 

Megan Marsh, business owner and co-host of The CoLab podcast, has gathered up tips to share business tips that will help you avoid common pitfalls encountered by business owners. Whether you’re just starting out or running an established operation, these tips for business owners will help your company run more smoothly and put extra money in your pockets.

Tip 1: Understand Your Numbers

Every business starts with a foundation and understanding the fundamentals is key to building a strong foundation for your business. So when it comes to knowing your numbers, that means more than hiring an accountant or bookkeeper to handle it for you.

You know your business mission, your product or service, and your customers, but if you don’t know numbers such as your revenues or taxable income, it can be difficult to advocate for your business and to reach your goals. Take a look at your business piece by piece to understand important information, such as your costs and revenues, the number of customers you serve, and which types of services or products you offer are the most successful in terms of profit.

Tip 2: Pick the Right Professionals for Your Business

As a business owner, it’s impossible to do everything yourself, so that means you may need to recruit other professionals to perform services for you, such as building a website for your company. An important tip for business owners is to do your research when it comes to hiring people for these tasks.

It can be helpful to find professionals who run or work for a small business. They understand your needs and your access to limited resources better than a larger cooperation. Weigh your options carefully and pick someone who will help you not only with your current needs but also help you grow and then accommodate those future needs.

Tip 3: Treat Your Bank like a Family Doctor

When you decide to start a business, you’ll need cash to cover startup costs. Picking the first bank that comes to mind for your needs might sound like a good idea now, but down the road you may find it doesn’t offer the products or services you need to continue growing your company.

A bank is just one piece of the puzzle when it comes to starting and growing your business. One bank may be good for holding your deposits. It’s like the family doctor you go to for basic care, such as treating a cold. When your business needs more specialized products such as mortgages and investments, you’ll want to find a lender that works specifically with self-employed borrowers. It would be similar to seeking out a specialist when you have a rare or aggressive illness. Seeking out that specialized expertise will benefit your business in the long-run by allowing you to continue growing it effectively and efficiently.

Tip 4: Purchase Property for Your Business

When you’re renting for a long period, you don’t have the opportunity to build up equity or wealth foundation like people who own their own homes. The same goes for businesses. If you have a team and are running a business outside of your home, a big mistake is not considering buying property.

It’s common that a down payment is required to purchase property, which may dissuade some business owners from doing so out of fear that they don’t have enough in the bank to make that down payment. The truth is you can buy a commercial property without a down payment, which keeps valuable dollars in your bank account. This brings us back to making sure you’re using the right bank with the right expertise for your needs. Shop around to find lenders that will have the best products in mind to help you purchase property with as small of a down payment as possible.

Tip 5: Review Your Finances Monthly

As a small business owner just starting out, margins are tight, and you’re always looking for ways to save money. That may mean doing your own bookkeeping and taxes to save money rather than paying someone else to do it for you. But as a business owner, you have a lot on your plate, and it’s easy to fall behind on those duties.

Refer back to Tip 2 and hire the right professional to handle your finances if you feel that responsibility has become too great for you to complete in a timely and accurate manner. You should have someone who can produce a financial statement that you review each month. This monthly review will help you identify areas within your business where you might be spending too much money or where you can save money. Having this information at hand will give you additional insight when making decisions for your business and put more money in your pocket.

Tip 6: Don’t Rely on Your Bank Account Balance

It’s easy to look at what’s in your business bank account and assume that is the money you have to run your business. But keep in mind that every day there is money being deposited and leaving your account (as well as impending changes that haven’t processed yet), so you’re not getting the whole picture if you’re just keeping an eye on the balance.

Instead of focusing on your account balance, look at your cash flow. It’s a better indicator of how your business is doing because it's a more complete look at your financial wellbeing. Reviewing your financial statements that we mentioned in Tip 5 will give you better insight into how your business is really performing.

Tip 7: Understand Your Key Performance Indicators (KPI)

Every business is different, so it’s important to identify and understand what factors drive the success of yours. These factors are called key performance indicators (KPI). An example of KPI might be the number of product units you need to sell in order to break even or turn a profit. Knowing these indicators will help you keep an eye on your business’ financial health and plan for future growth.

Keeping these tips for business owners in mind will help you avoid costly mistakes and keep your business on track for success.

For more business tips from The CoLab, visit our YouTube channel or connect with us on Facebook.

The Cólab Crush It Action Plan:

7 Steps to Small Business Transformation

Download It Now