Categories
Blog Business Cash Management Managing Your Business

10 Truths that all Small Business Owners Should Know

By Lynn Vos, area director of the Georgia SBDC Network

Last week a new business owner asked me what ten things would I tell a family member who was starting a business. This was an intriguing question and one that I pondered. At first, I thought of the standard things such as write a business plan, know your break-even point, know your target market, etc. Then I realized that you would pick that up in any literature on starting a business. It’s the other little nuggets that you need to know that you won’t necessarily find in a business book.

These “points to ponder” are really for all business owners, not just those who have recently started. As we know from recent economic conditions, all businesses can stray from the fundamentals.

So here are some tips to keep in mind as you go about your daily business:

1. Don’t ever forget that nobody will look after your money like you do. It’s okay to seek advice on investment strategies, tax savings, and other vehicles to make money. It may also be okay to let others keep your books, make deposits, and ring up sales. But at the end of the day, you need to know how much money you have, where it is, and if it is at risk.

2. There is always competition. No matter what product you sell or service you provide, your customers can find someone else to do it or they can just put their money in the bank. So never think that you are the only game in town.

3. There is no standing still; if you are not improving you are losing ground. I was at a seminar a few years ago and one of the speakers made an interesting point. He suggested that we as people were “depreciating.” The point made was that if you are not improving and learning new skill sets on a regular basis, you will become like old inventory…obsolete. This also holds true for businesses.

4. Just because it’s new technology doesn’t mean you need to have it. So many times I see business owners buy very sophisticated and expensive technology to do a job where a much less expensive and simpler technology would have been sufficient and easier to use.

5. It’s what the customer wants not what you want that counts. I think this speaks for itself. Stay focused on what the customer wants and don’t forget that customers vote with their wallet.

6. The time to seek legal advice is before you sign on the dotted line. All I can say is don’t be so in love with any piece of property you want to lease, any business you want to buy or sell, or any contract that you want to obtain that you don’t take the time to have it reviewed by your attorney before you commit to the deal.

7. Without revenue, nothing else matters in business. Don’t forget the basics of making sure your cash register rings. It is so easy to get distracted by administrative issues, but you must always remember that without sales there is no business.

8. Without performance, image means nothing. You can have the greatest marketing effort in the world but if you don’t have the ability to deliver the product or service, you’ve wasted everybody’s time and your money.

9. Get to know your banker before you need them. If you have a long-standing relationship with your banker before times get tough, it is easier for them to go to bat for you. They already understand your business and know your strengths.

10. Always have an exit strategy. You need to know how you plan to exit the business on both the winning side and losing side of the game. If your business is failing, how much can you afford to lose and when do you need to pull the plug? If your business is successful, how much do you want to sell the business for and what does it need to look like to get that price?

For more tips on better running your business or to speak with one of our business banking specialists, please send us a note or call 706.283.2854.

Categories
Business Cash Management

5 Tips for Tightening Up Your Cash Flow

By Michelle Wright, business consultant for the Georgia SBDC Network

Today, many small businesses face the daunting task of taming their expenses in challenging economic times. Here are some tips to remember that may make tightening up those purse strings a little easier:

1. Be aware of all overtime. Make sure on a daily basis that time is being checked and resources are being utilized efficiently. Not only do you pay time and a half, but you pay the social security and Medicare on the higher wages. Trying to keep overtime to a minimum will keep the wages and taxes in check.

2. If employees use company vehicles, check mileage. With the price of fuel being high, keeping a close eye on the number of miles that are driven will help ensure that you are not paying for personal errands with the company’s car.

3. Company cell phone usage should be reviewed. Is there a more efficient plan available for the number of minutes the company is using? Or, maybe the employee is making too many personal calls. Having the employee reimburse the company for minutes over the allotted plan could help keep your rates lower.

4. Shopping your suppliers. Have you checked to see if you can get better deals on your merchandise or services? When is the last time you did some shopping around? It may be time to look at insurance policies as well. Many business owners get so caught up in the day-today operations, they do not take the time to look at areas where they may be able to save a little money.

5. Review your marketing program. Are you tracking how new customers find out about your business? If not, you may not be utilizing you marketing dollars efficiently. Track where your customers are from and how they hear about you. Then, look at the information and see if you are paying for advertising that is not bringing in results. You should not cut out marketing. You need to make sure that people know you are still there. But you definitely want to make sure dollars going out are bringing dollars in.

Finally, while reviewing these expenses, you also need to review your sales prices. Small businesses will have to raise their prices to keep up with the increase in the cost of doing business. It is hard for the customer to take a huge increase, so a plan should be in place to raise your prices incrementally. Not only have fuel and many other products gone up tremendously in the last year, but the minimum wage is increasing each year also. Employers must plan ahead for these increases and not be taken by surprise.

Check out the competition. Make sure your prices are still competitive and you are covering your cost. By taking some time to review your expenses, watch your employees and monitor your prices, you should be swimming, not sinking.

For more cash flow tips or to speak with one of our business banking specialists, please send us a note or call 706.283.2854.