MoneyCentral Magazine

Small, Unnecessary Purchases

So you’ve just opened your business and you start buying all these interior design accent pieces that can’t really promise an influx of customers. In some cases, some owners get too obsessed with “cheap” buys not realizing that these small amounts pile up too. Think of the few hundred dollars spent on décor and a nice coffee table that could have been used to pay your power bills. Remember, the goal is to have a fast return on your investment, so you may want to stop spending on unnecessary, inexpensive buys because those “discounted” prices add up too.

Hiring too Many Staff too soon

The success of your business is extremely proportionate to the amount of work that you put into it. At the onset of your venture, try to minimize your expenses, including employee salary. If you can do away with just one or two helpers, then by all means, hire less. Most successful startups have owners who went through sleepless nights, survived on home-cooked meals, and some even had to be their own store’s painter, janitor, and handyman. Salaries are part of overhead expenses and if you can cut cost on overhead, you can direct your funds on better channels such as marketing and lead creation. The last thing you want is to overlay your employees because you can’t afford to pay their wages any longer.

Poor Accounting

There is a misconception that small businesses do not need painstaking accounting work. You raise a capital, earn, and that’s about it… Wrong!

The fact is, small businesses need more accounting work in tracking how the money spent on rent, stocks, supplies, and contingencies compared to big, stable corporations who already have a system in place. Other miscellaneous expenses should also be listed and itemized so you can check if you’re spending too much on minor things. This will also help you decide on expenses where you can cut down and save. Ideally, your operational expenses should not exceed your average daily or monthly income. If you lose sight of where your money is going, it may be too late for you to realize that your business is slowly losing money, and everything can be gone at your own expense.

If you’re frugal and prudent enough, you’ll know the things that deserve a chunk of your startup capital, and those that can wait for later. Maintaining healthy cash flow can be tricky, and there WILL always be lean months where you’re almost just break even. Regardless of these challenges, resilience and the ability to adapt and redesign your business strategies can draw the line between bankruptcy and brand endurance.

image via Shutterstock / Gyorgy Barna

Let’s face it; people these days are constantly trying to find ways to take themselves out from the rat race of employment. More and more people now are seriously considering opening a business rather than staying employed all their lives – and I bet you are one of them.

Here’s the thing though, wanting to start a business is completely different from actually starting one. So to help you get started in your journey to entrepreneurship, here are five simple yet clever tips to help you thrive in your own business:

Know your prospective customers’ needs

In identifying which business to put up, you have to ask the question “what do they need that I can offer?” By asking this, you automatically know if you have possible clients who will take advantage of your products or services. Let your hobby make money. Do you have an exceptional knack for crocheting? Do you bake the best cookies in the neighbourhood? Are you remarkably skilled in Taekwondo and can teach children? If it’s a yes, then you might have just found the perfect business venture for you.

Finding the right business for you is crucial to its success

Just like choosing the best prom dress, a business investment must be a perfect fit. You will need to have the skills, knowledge and the motivation to grow and develop it. When you do something that personally involves you, you will give it your best, and almost always, the result will be positive. Examine yourself and assess what talents and skills you have which will aid you in choosing the business of your dreams.

Start small

Most people engage in business in order to improve their way of life, and maybe keep a million dollars in their savings account. And though the idea of making a lot of money maybe tempting, zeroing your certificate of deposit to fund your wonderfully crafted idea of a business may not be the best move. Like anything else in life, business is still a gamble. There are a lot of factors at play, and making huge investments in something you are not 200% sure off is not the way to go. So, start small. If you are planning to set up a boutique, it might be better to set up an online shop first (which is really a trend right now). You can cut some of the cost from starting an actual store and also build a line of loyal customers.

Do your research

What is the age bracket of your target customers? Are there a lot of them in the area where you plan to set up your small company? How many competitors will you have in your chosen location? How accessible is your business site?

These are just a few of the things that you will need to look into so you can project how well your prospect business will fare. Distinguishing these things will help you devise ways to sell your products and services. It will also help you decide if your business is worth investing in or not.

Draft a business plan

With so many things to consider, putting up a business can be confusing and nerve-wracking. That is why it is critical to draft a business plan so you can clearly see where you are going in your investment.

Think of your business goals as a treasure, and the business plan is the map to help you get to it. You will have a better picture of the things that you need to do to get to where you want your business to be.