Tips for Small Business Success

For small business owners everywhere, here are 5 proven tips for small business success, courtesy of “The University of Hard Knocks.”

Tip #1  Cash is King.  This lesson should not need to be learned the hard way.  Simply stated, cash in your company’s bank account is the key to a good night’s rest for you.  Think about how you felt when there was a nice piece of cash in your company’s bank account.  Then, think about you felt when your company’s bank account was low on cash.  Which feeling did you enjoy more?

Tip #2  A banker will always lend you his umbrella when it is sunny out.  This one is an oldie, but goodie.  As a matter of fact, it is an old banker’s joke.  It means that when your company does not need money, a bank is always willing to lend it to you.  Conversely, when your company needs money in the worst way, a bank probably won’t lend it to you.  Avoid this scenario by following Tip #1.

Tip #3  Grow your business at the pace that works for you and you only.  Just because your business owner pals claim to be growing their businesses by 100%-500% per year, doesn’t mean that you need to.  Pick the pace of growth that works for you and won’t keep you in a constant state of needing to raise more capital.  Managing a rapidly-growing under-capitalized business is never fun.

Tip #4  If you build it, the customers will come.  As soon as your business starts to generate some revenue, you run out and rent a high-priced office, staff it with plenty of employees and computers, but more customers don’t come and your bank account ends up awfully low.  Congratulations!  You have now experienced, first-hand, the delicate balance of growing a business.  Your rapidly growing business couldn’t handle the costs that you rapidly piled on to it.  Don’t rush it.  Keep a firm handle on how a new hire, or a new office, or new computers will impact your bottom line.  Don’t overdo it.

Tip #5  If you insist on worrying, then worry about making profits.  First and foremost, your company needs revenue and profits to survive.  If you have revenue and no profits, then you will soon find yourself out of business.  Generating enough revenue to pay your expenses and leave you with a profit is the name of the game.

We hope you enjoyed these 5 tips for small business success.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

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