Top 20 Tips for New Small Business Owners
We recently wrapped up our Small Business Real Talk Contest, and we received twenty pieces of thoughtful and insightful advice from successful small business owners. It turns out that there are a lot of things you should know before launching your small business — who knew, right?
We’ll be announcing the winner on the blog next week, but we wanted to share this wealth of information with all the brave individuals out there about to start their own small business. Here are the top twenty tips from those who have come before:
1. Start using accounting software from day one. It’s important to find time to reconcile your books each month to avoid lumping a year’s worth of work into that second week in April. Prepare and bite off small pieces, it will pay off come April 15.
2. Make sure you are doing something you love. Build a plan – a general outline – of what you are trying to accomplish. Reach out to others who are driven and passionate about the goal of your business. Use products like Shoeboxed and Quickbooks to help keep track of the financial details, and a program like Outlook to manage your email and contacts; that way you can focus on the broader picture.
3. The biggest advice I wish I had before I started Tech Reviews and Help is how to advertise the company.
4. No one really says how to build a business client list. The best way to do this is to become a working member of the community that you live in. get involved in community organizations. If you have children, get involved in the schools. Also, your church. If people see that you care then they are very likely to support your business. They say it takes a village, well you need to be part of the village.
5. Know your numbers (key performance indicators), exactly what they mean to the business, and how to use them.The first five years I pretended I could “wing it” with my business finances which got me feast or famine. Finally, a mentor showed me exactly how to create a reasonable and realistic finance plan. Experiencing how to create a budget and spending plan which included forecasting and figuring out the right product mix, and also extrapolating to what marketing activities I needed to do consistently to hit my numbers ensured my revenue equalized and grew.
6. Have a bias for action. A good plan implemented with vigor is better than a perfect plan, which won’t get implemented at all because you are still perfecting it. “Ready fire aim” may not sound like sound advice, but to an extent it is!
7. Build a database of customers first, then build a product or service around those customers.
8. I’ve founded or co-founded a dozen businesses, but the one piece of advice I wish someone had impressed upon me from the start was to get customers from day one, even before building the product. The entire business should be built around the customer, and products should be designed and built with a handful of targeted clients involved very, very early. Almost every product can do this; there’s no reason not to. And the myth that Apple doesn’t do this, i.e. doesn’t use focus groups to drive product development, is exactly that, a myth. Steve Jobs was constantly talking to hundreds of people (potential customers) about product, product, product, all throughout his career.Corporate governance, internal systems, & financing structures all matter a great deal, as does the quality of people in the organization, of course, but focusing on the customer early and constantly is by far the most important differentiating factor between success and failure, in my opinion.
9. Computerize your business from the start. Computerizing a small business is a complex and transformative process, but a change all small businesses should consider to compete in an increasingly digital economy. Using computers can help reduce costs, control spending, manage tasks, increase your companies visibility with a web site and much more. A computerized business is an organized business.
10. It would have helped a lot if more people had pointed out the importance of 1 and 5 year business plans and how they related to expenses and budgets :-) Maybe some non-profit/Kickstarter should focus on this, personally I think it’ll keep more new SMBs afloat.
11. Evaluate decisions from the customer’s perspective. How will this decision help or hinder them? Too often we start to think in terms of behind-the-scenes problem solving and become detached from the part that matters; the client.
12. Document and write down everything you do! Don’t let anything internal, be tribal knowledge.
13. Write down the characteristics of your ideal client/customer and focus on building your business around those clients.
14. Identify those non-revenue generating tasks that somebody else can do and find someone to do them. The more time you spend doing support and administrative tasks, the less time you have to spend marketing and growing your business.When starting out, most small business owners are very concerned about expenses and do these support items themselves, since they don’t take too much time. As the business grows, the support items take more and more time, yet the business owner continues to do these. This is valuable time that could be spent generating more sales.
15. I’m really grateful a friend made me establish an LLC over a DBA. It took s little more paperwork but gave me a piece of mind that’s hard to find when you are first starting out.
16. Have a growth plan and strategy written down and review it frequently, even though you probably won’t end up following it too well. The process of playing out scenarios and strategies on paper is invaluable and can shed some light in darker times ahead.
17. Just START. There’s no amount of books, workshops, info products, or coaching that is as powerful as taking the leap and putting yourself out there. What’s more important? Having a professionally done website created for $5000 or finding customers and making money?
18. There will never be a perfect time to start a new project. You’ll always have reservations. You’ll always be busy.
19. Do it anyway. You can always decide later that it wasn’t perfect and learn from the experience, but if you never start I can guarantee that you’ll never finish.
20. Don’t wait until everything is perfect before you launch — do it now. With the foundational elements in place, you’ll modify processes multiple times over the first year. This way you do it in real time.
Thanks for all the awesome small business advice, Shoeboxers! We’d also like to send a big thank you to our judges: Melinda Emerson, Steve Strauss and Casey Steinbacher.
The Shoeboxed Team