Working hard and doing your job the best you can are great practices to follow. However, is that all you need to do to succeed in your business? There are more general business practices that should be followed to achieve success.
First and foremost, a business plan is a solid foundation for any business owner. You don’t have to spend long hours and a lot of money to develop your plan, but it should contain the basics.
What is the feasibility of the business idea
What can you reasonably expect in revenue over the first couple of years and what is your cost to operate? Then determine what profit margin to expect.
Know your breakeven point
Your business typically has to pay for its own costs and support your personal needs. Your business plan should communicate at what revenue point (daily, weekly, or monthly) you have covered all these costs, or what’s known as the breakeven point. Factor in your personal costs as part of your business plan and re-evaluate costs at least every six months or whenever there is a significant change in your business or personal life. ATBS consultants work with small business owners on this process regularly and help customize our client’s plans to become their personal “profit plan”.
Manage time and produce efficiently
Simply generating more business and producing more top-line revenue does not always translate to more money in your pocket. Managing your time according to business cycles will help you predict when a slow time is approaching so you are prepared with savings to back up your business. Slow times are also good to know for personal time and vacation. Taking a vacation during a busy season is probably not a smart business decision.
Keep good records and have an accounting system
Record keeping is not only vital for a less stressful tax time, but also provides a good base of information to make informed business management decisions. Basic accounting statements, like a Profit and Loss Statement (P&L), compile revenue and business expenses into a snapshot of your business operations. This accounting report should not only communicate the gross revenue and net income of the business, but also identify financial strengths and weaknesses of your operation compared to your business plan. This will allow you to place your efforts where they will have the most impact on the bottom line. ATBS produces monthly P&L’s for our clients that allow us to provide strategic business consultations. In fact, the P&L’s that are prepared are accessible online 24 hours a day.
Respect your customers
As a small business owner, you have complete control over your relationship with the customer. Trust is an essential element for business success. Develop trust early to watch your business flourish. Do a good job for your customers and don’t make excuses.
Comply with laws and regulations
Even the most well run and profitable business can fail if it’s run outside of established industry laws and regulations. Many of the laws and regulations seem cumbersome and can even be annoying, but they are part of every industry. Ignoring laws and regulations will affect your bottom line and possibly put you out of business quickly.
Work with industry experts
Seek the professional advice of business consultants and counselors within your industry. This is the best way to improve your company’s chances of success.
You may be the best producer in your industry with many years of experience, but the chances of being successful are improved dramatically when you also utilize good basic business practices.
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