Just because you own a small business doesn’t necessarily mean you know how to be a good boss or better yet be financially savvy. The learning curve for owning a business is tough and most times it’s a game of trial and error. You started out with a lot of zeal on your quest to build a thriving business but along the way, you settled for just getting by, right? If yes, this is your chance to achieve those ambitious goals you were once sure of. We may be far from a well cut out path but as a small business owner, I have amassed a few lessons that may be beneficial to you.
Proper financial management
As cliché as this may sound, it doesn’t hurt to repeat it- financial misuse is one of the main causes of the death of small businesses. It doesn’t have to be something as profound as money being stolen; it could be a simple case of buying overpriced products. Instead of bearing the high cost of products from your supplier, why not look for discounted rates on sites like promocodewatch? Another way is indulging unnecessary expenses. If the cost of printing is high go paperless; if travelling costs are skyrocketing video conference instead.
Affiliate partners and distributors
Linking up with manufacturers’ representatives to sell your products through their existing extensive distribution channels is a great way to conserve cash and build up sales quickly. This way you will mint a lot of money without breaking a sweat. One mistake people make is paying the partner before your products are sold. Do not repeat the same.
Penny-pinching practices
When you fall on the crest of a wave don’t be too fast to reap the benefits of early success. You will be better served conserving the initial capital and partake in some penny-pinching practices.
Start by setting your salaries as low as possible then seal the deal with hefty performance bonuses. This will motivate your employees to work harder and those who fall short will get the bitter end of the deal.
Employee benefits should be limited to those legally or competitively necessary and no more. Entertain and travel as if the money is coming out of your own pocket and not the business. It doesn’t do you any good being overly generous at the cost of your business.
This will eventually allow you to maintain your capital base as well as close the wide gap of the breakeven point of profitability.
Be convincing and be willing to be convinced
As the leader of the company, you should have the humility to listen to the ideas of those under you, be open to being sold on them and most of all champion your employees to come up with more.
When they are heard, they will be empowered to have a problem-solving kind of mindset. A business with such a culture will see increased quality of solutions to the problems faced and in the end improve productivity.
The best idea should take the floor no matter its origin.
