5 vital aspects you must know for success in small business
- Track your return on investment (“ROI”).
- Monitor cash flow statement frequently
- Leverage with talent human resource
- Leverage social media
- Develop and have an emergency plan in place
First-time small business owners must master these 5 indispensable aspects because they are vital business factors for every business owners.
Track your return on investment (“ROI”)
Business owner must keep track on:
- How much you invest?
- What you invest your money on?
- What you get in return for every dollar you invest?
This ROI tracking would help the business owner easier to decide where to invest and allocate your money in the future during your annual budget analysis review.
Monitor cash flow statement frequently
Diligently and thoroughly monitor cash flow statement. Business owner should only spend from the revenue you derive from the sale of your products or services.
Small business must learn how to control and ensure you have sufficient cash to cover operating expenses for at least 90 days. You have to anticipate and manage the time-lag between completing a project and receive payment.
For your small business, the cash flow statement may be the most important financial statement you organize. It traces the flow of funds (or working capital) into and out of your business during an accounting period.
For a small business, a cash flow statement should probably be prepared as frequently as possible. This means either monthly or quarterly. An annual statement is a must for any business.
In short, a cash flow statement can be used to assess the timing, amount and predictability of future cash flows and it can be used as the basis for budgeting. You can use a cash flow statement to answer the questions, “Where did the money come from?” “Where did it go?”.
Leverage with talent human resource
Small business must know what you look for and what to shun when recruit a new talent human resource. Please note your human resource is also a key area of ROI. Hiring an unfit employee can be a catastrophic impact on a small business. You must follow all required steps and take time to make your recruitment decision.
In other hand, business owner needs to make genuine attempt to correct the unfit employee within a set period of time. If he can not show any improvement or progress, you need to let him go swiftly and gracefully.
Leverage social media
such as Facebook, Linkedin, Google+, Pinterest and other popular sites. Social media is where your prospective clients and customers often hangout. Business owner’s profile must be crafted relevant to your audience and willing to participate in online discussions in your industry related chats.
Emergency Plan in place
Business owner should be prepared for a natural disaster which could either completely discontinue or disrupt your business operation. Your emergency plan should be include at the very least an alternate lines of communications with clients in order to preserve the integrity of your service. In addition, you also maintain, upgrade and updated IT equipment.
More effectively, you need to identify your critical business functions— what resources and personnel will you need to restore or reproduce these functions during a recovery? Assign disaster response duties to your employees. In addition, business owner needs to identify critical suppliers—Identify suppliers, providers, shippers, resources, and other businesses you typically interact with and need to keep your business operating. Develop professional relationships with backup vendors, in case your normal vendor isn’t available due to the emergency.
In short, the more you plan in advance for potential disaster, the quicker you recover and keep your valued and core client intact.
In conclusion, your chance for building a successful small business requires 1) Track your return on investment, 2) Monitor cash flow statement frequently, 3) Leverage with talent human resource, 4) Leverage social media and 5) Develop and have an emergency plan in place.
Resources at Amazon Corner:
- The Small Business Bible: Everything You Need to Know to Succeed in Your Small Business
- The Big Book of Small Business: You Don’t Have to Run Your Business by the Seat of Your Pants
- The Small Business Owner’s Manual: Everything You Need to Know to Start Up and Run Your Business
- How to Succeed as a Small Business Owner … and Still Have a Life
- The Wall Street Journal Complete Small Business Guidebook
- Guardian Life Report Identifies Six Traits of Successful Small Businesses _ Inc
- Richard Branson’s Tips for Growing Your Small Business
- 7 Key Steps to Starting A Successful Small Business – Forbes
- 4 fundamental Ways Really Increase Your Revenue and Asset in Business
- 5 IRS Categories’ Audit Risk for Small Businesses
- What are essential requirements for a successful entrepreneur?