The small business industry had been experiencing dynamic growth during the last few years. While it may sound great on surface, there are several negative implications associated with the said growth.
The most obvious negative implication of a stronger small business industry is the high unemployment rate in the United States. Most employees who have been laid off tried their luck in business – unfortunately, only a small fraction of new businesses succeed.
Business failure rates are simply frightening for the newbie entrepreneur. Nonetheless, there are several ways on how they can increase their chances of succeeding in the field of small business.
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Tip 1: Prepare for the worst-case scenario by protecting your personal assets
When starting a new business, entrepreneurs should completely understand all the risks associated. Starting a business is a journey to the unknown and is definitely not for the faint-hearted.
Entrepreneurs who are still in the startup phase should protect their personal assets as much as the law permits. The mere organizational structure of a business can actually be used in order to protect the owner’s assets.
Most conservative business analysts advise starting a LLC or a limited partnership as a way to better protect one’s personal assets.
Tip 2: Adopt a system of checks and balances as well as an effective cash flow system
Adopting a sound system of checks and balances is a great way to monitor the growth and progress of your business. Similarly, it is also a genuine way of measuring the loyalty of your employees at the same time an excellent quality control mechanism.
Newbie entrepreneurs must also exert effort in learning and understanding their companies’ cash flow system. It is essential to know exactly where cash comes from and how was it spend.
Maintaining a comprehensive record of every cash inflows and cash outflows, with a tool like Workday, is imperative to achieve lasting business success.
Tip 3: Write a comprehensive business plan
Writing a business plan is one of the most critical yet most took for granted step in starting a business. Failing to plan is equivalent to planning to fail. Thus, it isn’t a mystery why planning is one of the four areas of management.
A business plan will serve as a roadmap to the success of a business. Likewise, a business plan is also a great tool in attracting investors.
Tip 4: Start small and keep both your business and personal expenses low
Entrepreneurs especially those that are still in the early phases of their business should keep both their business and personal expenses low. Starting small allows you to better digest each and every challenge your business face. In addition, it helps you and your business to prepare for the growing pains that will inevitably surround and hinder your business.
Author Bio: Michael Scottsdale is a financial advisor and currently works as a consultant for small businesses. When he’s not writing for Gold for Cash, he could be found blogging about simple tips on how people could take advantage of the internet’s numerous business opportunities.