Connect with us

Start-up Advice

15 Business Tips Every Entrepreneur Should Know

Behind every failed company are dysfunctional, delusional, or incompetent business leaders. Don’t be one of them.

Steve Tobak

Published

on

business-woman

The biggest problem founders and small business owners have is that they’re experts in their field and novices in what it really takes to effectively run a business. That’s what usually trips them up, sooner or later.

Don’t let that happen to you. Admit that you don’t know what you don’t know about business, starting with these 15 tips guaranteed to help keep you and your company out of hot water.

We-recommend-tickWe recommend: 6 Things I Wish Somebody Had Told Me When I Started My Small Business

Some are straight-forward, others are counterintuitive, but they’re all true. And some day they’ll save your butt.

Always make sure there is and will be enough cash in the bank

Period. The most common business-failure mode, hands down, is running out of cash. If you know you’ve got a cash flow or liquidity problem coming up, fix it now.

You can’t fire bad employees fast enough

You just can’t. Just make sure you know they’re the problem, not you (see next tip).

The problem is probably you

When I was a young manager, my company sent us all to a week of quality training where the most important concept we learned was that 90 percent of all problems are management problems.

When things aren’t going well, the first place to look for answers is in the mirror.

Take care of your stars

This goes for every company, big and small. The cost of losing a star employee is enormous, yet business leaders rarely take the time to ensure their top performers are properly motivated, challenged, and compensated.

Your people are not your kids, your personal assistants, or your shrink

If you use and abuse them that way, you will come to regret it. Capiche?

We-recommend-tickWe recommend: Keeping It Simple

Learn to say “yes” and “no” a lot

The two most important words business owners and founders have at their disposal are “yes” and “no.” Learn to say them a lot. And that means being decisive. The most important reason to focus – to be clear on what your company does – is to be clear on all the things it doesn’t do.

Listen to your customers

It boggles my mind how little most entrepreneurs value their customers when, not only are their feedback and input among the most critical information they will ever learn, but their repeat business is the easiest business to get.

Learn two words: Meritocracy and nepotism

The first is how you run an organisation – by recognising, rewarding, and compensating based solely on ability and achievement. The second is how you don’t run an organisation – by playing favourites and being biased.

Know when and when not to be transparent

Transparency is as detrimental at some times as it is beneficial at others. There are times to share openly and times to zip it. You need to know when and with whom to do one versus the other. It comes with experience.

Trust your gut

This phrase is often repeated but rarely understood. It means that your own instincts are an extremely valuable decision-making tool.

Too often we end up saying in retrospect and with regret, “Damn, I knew that was a bad idea.” But the key is to know how to access your instincts. Just sit, be quiet, and listen to yourself.

We-recommend-tickWe recommend: 6 Attributes of Great Entrepreneurs

Protect and defend your intellectual property

Most of you don’t know the difference between a copyright, trademark, trade secret, and patent. That’s not acceptable. If you don’t protect and defend your IP, you will lose your only competitive advantage.

Learn to read and write effective agreements

You know the expression “good fences make good neighbors?” It’s the same in business. The more effective your agreements are, the better your business relationships will be.

Run your business like a business

Far too many entrepreneurs run their business like an extension of their personal finances. Bad idea. Very bad idea. Construct the right business entity and keep it separate from your personal life.

Know your finances inside and out

If you don’t know your revenues, expenses, capital requirements, profits (gross and net), debt, cash flow, and effective tax rate – among other things – you’re asking for trouble. Big trouble.

You don’t know what you don’t know

Humility is a powerful trait for leaders, and that goes for new business owners, veteran CEOs of Fortune 500 companies, and everyone in between. More times than not, you will come to regret thinking you knew all the answers.

We-recommend-tickWe recommend: 7 Attributes of an Extraordinary Entrepreneur

Behind every failed company are dysfunctional, delusional, or incompetent business leaders. The irony is, none of them had the slightest idea that was true at the time. Even sadder, most of them still don’t. Don’t end up like one of them.

 

This article was originally posted here on Entrepreneur.com.

Steve Tobak is managing partner of Invisor Consulting -- a Silicon Valley-based management and strategy consulting firm -- and a former senior executive of the technology industry

Start-up Advice

(Infographic)The Do’s And Don’ts Of Naming Your Business

There’s a lot that goes into a company’s name.

Published

on

naming-your-business-2019

Finding the right name for your business can be crucial to its success. If you’ve got a boring, vague name, then you might repel potential customers.

When it comes down to it, there are some major do’s and don’ts that go along with naming your company. For starters, keep things simple and short – a long name can confuse potential customers and won’t make a lasting impression on them.

Your name should also tell your story. Not only will this help people recognise your company but you’ll build the brand’s character.

Something a lot of people don’t think about is how their company’s name will sound in another language. Even if you’re in the early stages of building your company, who knows what could happen in the future. So create a name that sounds good and has a positive translation in any country. Next, always test your ideas before setting them in stone.

Ask potential customers to take a survey and compare your name with other companies in the same industry. Of course, you also must ensure that the name you came up is even available.

To learn how you can create the best name for your business, check out Business Backer‘s infographic below.

do-donts-naming-business-infographic

Related: Your New Business Name Should Be Memorable, Spell-able And Available

This article was originally posted here on Entrepreneur.com.


Read next: How to Name (Or In Some Cases, Rename) Your Company

Continue Reading

Start-up Advice

Fuel Your Hustle

These two practical goal posts will keep your start-up on track, even when things get tough and you start to lose traction.

Published

on

passion-entrepreneur

Make sure you have a clear vision and a plan — something to chase and celebrate when targets are achieved.

When you start a new business, everything is exciting. You have a dream, something to work for. Once the business takes off, it’s easy to fall into a rat race of just going to work and reacting to challenges as they happen. Many established business owners get to a place where they wonder if it’s all worth the effort. Whenever I talk to entrepreneurs feeling this way, I always ask them what they are working towards.

Most times, they don’t have an answer.

No, I’m not going to give a motivational talk on how important goals are, but I do believe it’s important to work towards something. To chase something worthwhile. Is it a vision and mission statement? Maybe that fuels your energy, but there are two practical things that I can suggest to any entrepreneur to keep you on track, and keep you motivated with a reason to wake up in the morning.

1. A one-page business plan

The logic behind a business plan is great. It’s a plotted journey, with marked goals and targets. It gives you something to work on, and work towards. And you’ll definitely need one if you’re looking for financing. But very seldom does it actually become a real working document for the small business owner; business plans are too long-winded and rigid and don’t allow for the fast changes and flexibility you’re going to need when you’re running a business.

So, gut instinct is how most survive, and the plan goes into the middle drawer.

That doesn’t mean you don’t need a plan. It just means you need a different kind of plan — one that works for you at the stage you’re at. A one-pager plan that acts as a dynamic working document is where it’s at. The keyword here is dynamic.

Try to compile a one-pager of what you aim to achieve in the next year. Break it down per month and list the small steps that you will be taking to reach your bigger vision at the end of the year. This plan could include anything, but you should know that it will be your guide to what is important and what isn’t.

Work on it weekly, review it monthly and ensure that you are moving in the right direction. At the start of every month, review your plan and list your priorities for the month. If you hit a snag, stop, re-evaluate your plan, make changes and move on. It is not set in concrete. It is dynamic.

Too many entrepreneurs go to work each day and solve issues as they arise without planning proactively for what they want. Others view their business plan — all 100 pages of it — like it’s the Bible. Neither approach will get you very far.

The one-pager will be your plan, your guide. Keep it with you at all times so it can be as flexible as you need to be.

Related: Keep It Simple: How To Write A One Page Business Plan

2. Your break-even figure

For most entrepreneurs, numbers are one of those complicated matters best left to others, although it needn’t be that way. And when it comes to one particular number, it cannot be that way: That number is the break-even figure. It’s the one number every entrepreneur must know. If you don’t have a break-even figure, how will you know if you’re succeeding or failing?

A break-even figure is the amount of sales you need to make in a month to cover all expenses and to make a target profit. If you can calculate this, then you have a number that you can chase every day — something that is measurable and understandable for the entrepreneur.

The break-even figure is calculated by using three figures:

  1. Gross Profit Percentage: Your gross profit percentage is calculated by taking your gross profit (sales minus cost of sales) divided by your sales. Let’s say you sell a product for R200 and the cost of that product is R150, then your gross profit will be R50. Your gross profit percentage therefore is 25% (gross profit (R50) divided by sales (R200).
  2. Overheads: Overheads are the total of all your fixed expenses each month. Examples include rent, salaries, Internet, fuel and all other costs that you need to pay, e.g. R100 000.
  3. Profit Target: This is the profit you would like to achieve in a month, e.g. R20 000.

Related: Self-Made Millionaire At 24 Marnus Broodryk On How To Build A R1 Billion Business

Now that we have these three figures, we can calculate our break-even amount:

Break-even = (overheads + profit target) divided by gross profit percentage.

So, continuing the above example:

Break-even = (R100 000 + R20 000) / 25% = R480 000

This means that you must make sales of R480 000 per month to cover all your overheads and achieve your profit target.

If you have this figure you can now plan how to achieve this target and go out every day chasing a goal, rather than just crossing your fingers. One can take this number and divide it by the number of working days in a month to get to a daily target of sales. Also, make sure it’s on your one-page dynamic plan.

Sometimes, we just need basic things to give our journey meaning again. Something to chase and something to celebrate once we’ve achieved it (yes, make sure you celebrate). To have goals, a clear vision and a one-pager plan might sound like petty things when you run a business — but you might soon realise that you need these things to keep you going.

Continue Reading

Start-up Advice

Insurances To Consider If You Are Starting Your Own Business

Below are just some of the insurances you need to consider if you are starting your own business.

Amy Galbraith

Published

on

insurance-advice

Starting your own business is a brave and bold step. You will be joining many others in the journey of becoming your own boss, and this can be a stressful time. You will need to have a sound business plan in place, as well as other aspects that will secure both your business and your financial future. These include certain insurances that are geared toward insuring your salary, your investments and yourself.

All small business owners should look into taking out funeral insurance so that their family is not burdened and can pay for their funeral, investment insurance so that their money is protected and commercial insurance to protect your business and your property.

Below are just some of the insurances you need to consider if you are starting your own business.

General liability insurance

General liability insurance is important because it will protect you and your business from any possible legal action taken by customers. This insurance protects you in case of any injury to or damage to a customer which happened on your property.

It is also important if you manufacture products, but this would fall under product liability insurance. If a product harms a consumer, then you are legally responsible for expenses which means that having liability insurance will help immensely with costs. If you sell homemade cakes, toys for children or even clothing, liability insurance should be at the top of your list.

Related: I would like to start an insurance business. What are the basic guidelines?

Funeral insurance

Now, you might not think that funeral plans are that important but, in fact, they are. Not only for you but for the employees you might have. Funeral cover pays your family a lump sum within 48 hours of your death so that they can pay for your funeral without having to worry about expenses.

As a small business owner, funeral plans make sense. You will likely be the sole breadwinner, which means that your family will be under considerable strain if you die. The same can be said of your employees. Their families will need to be able to pay for their funerals, and it will also ensure that employees stay loyal to your business.

Funeral cover is a benefit that many companies offer their employees to ensure they’re happy and satisfied in their roles.

Property insurance

If you own property or are leasing a building, property insurance is vital. This insurance covers your office equipment, the signage both inside and outside the building, all office furniture as well as your inventory. These will all be covered for disasters such as fire or a storm as well as in case of theft or damage.

However, it is important to note that if your business is based in your home, your homeowner’s insurance will not cover any business equipment. This means that you will have to take out additional insurance for your business equipment. You will also need to speak to your insurer about disaster coverage, especially if your business is based in an area that is prone to fires and floods. Property insurance is important because it will protect your business from incurring costs it cannot afford.

Commercial auto insurance

If you use a company car or have bought a car specifically for your business, you will need to take out commercial auto insurance. Just as homeowner’s insurance will not cover your business inventory, personal auto insurance will not cover a commercial or business vehicle. This is why commercial auto insurance is so important.

If your employees drive their own vehicles to and from work, you should try to ensure that they have personal auto insurance. And if they use their own vehicles for business reasons, you could ask your insurance provider about covering the risk as part of your general liability insurance. This will keep them safe in case of any accidents that might occur during their trip.

It is a good idea to purchase or hire a company car for your employees to use for any business trips so that your employees are safe and correctly insured.

Related: Insurance For Small Businesses: What Should Be Covered?

Look after your staff and business

Along with funeral insurance, workers compensation insurance is important for ensuring your staff is covered for any eventuality. And it will show them that you value them as employees, which will keep them happy and content in their roles.

This insurance will cover medical bills, death and disability benefits if an employee is injured on the job or on your property as well as salary protection. If you offer these as separate packages, you will not have to worry about worker’s compensation insurance but you will need to speak to an insurance broker about this. Protecting your employees is the mark of a true company leader, and happy workers are also more productive.

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending