Top 5 Tips for Running your Business
Running a business can be stressful, draining, exciting and rewarding all at the same time. But whether you're a small business just starting out, or you're looking toward bigger and better things, these tips can help you on your way.
1. Start Small and Keep your Overheads Low
When you're first starting out don't try and go out all guns blazing by getting the biggest office and workforce you can find. This can only lead to trouble. By starting small and slowly growing your business you can make sure you're taking the right steps for where you're currently standing. So before you go looking at expensive office space, think about the following:
- Your office can be your laptop in your kitchen
- When working from home, you may have to make sure your homeowners insurance covers you (More about working from home in this post)
- Set up a different bank account that's separate from your personal one (there's no legal reason for this, it can just make life easier when it comes to filing your accounts)
2. Keep a Close Eye on your Cashflow
Unless you have the most amazing clients imaginable then it's unlikely they'll all pay you on time. This can mean your business will potentially run into debt. In order to help avoid this happening you can:
- Agree payment terms before any work is carried out
- Make it clear that you will charge interest on any overdue invoices, commonly 8% above Bank of England base rate under the Late Payment of Commercial Debts (Interest) Act 1998. However, you can agree different terms with your client if you wish
- Don't spend money now thinking your clients will pay on time. Plan your expenses around the money you currently have, not the money you're expecting to have by a certain date.
- Until your business is taking in money hand over fist, then maybe consider a second revenue stream - such as a part time job.
Just remember that most new businesses suffer with financial difficulty for a while, if your business is up to it, you'll soon be over them.
3. Plan for Most Things
There's a saying out there
Failing to plan is planning to fail., which shows that you should really be planning for different outcomes within your business.
- Give yourself an idea of the monthly costs of running your business. This will help with budgeting and, as such, can help you have an idea of what you should be charging your clients in order to make a profit.
- Now work out what money you will need to be bringing in each month in order to make a profit, and not just keep your head above water. If you can do this for a 12 month period then you will be able to roughly see the growth of your business. But remember to expect the unexpected.
These can be tough things to think of, but do your research as there are plenty of guides out there that can help you plan in this way. Also consider producing a cashflow forecast to help you plan ahead.
4. Get out and do the meet and greet
In short - Network.
By getting your face and your business in front of other people, it's more likely they will use you rather than some other faceless business on the internet. That being said, there are online networks that you can join that can help to get you seen by more people over the internet, which may help to boost online sales.
Remember: Networking isn't about selling. People are used to being sold to. Networking these days is about helping, offering advice and being a nice person. Rather than meeting a person and straight away giving them a business card, you should wait until you're asked for a card. If they give you theirs then you should contact them with some useful information within 48 hours, in this contact you should point them towards your website or other source of information about your business and what you do.
5. You're ready; You're set; Now Sell
Don't be shy when it comes to sales. Market yourself and your business. This may mean learning to do it yourself, but it's something that can save you money by not hiring an outside company to do it for you. You should also be looking at the money making aspects of your business, if you find that you have an amazing product that no one's buying then you can market it better for a while and if there's still no bites then you may have to consider dropping the aforementioned product in favour of a more profitable venture. However, good market research should help prevent this situation.
Of course there are other tips that you can use in order to boost your business but, by following these 5, you'll be well on your way.
Looking for more?
If you're looking for more tips, we have more tips here:
- 13 May 2021 - Should I Use a Formation Agent?
- 07 May 2021 - How Can I Resign as a Director?
- 29 Apr 2021 - Can Sole Traders Have Employees?
- 23 Apr 2021 - I've Lost My Incorporation Certificate - What Should I Do?
- 15 Apr 2021 - What's The Difference Between Contractors, Freelancers and Consultants?