Being a small-business owner can feel like a never-ending race. It takes stamina, discipline, and a surprising amount of work to succeed. Owning your own company isn’t just about fulfilling a passion; it’s about knocking down all the unexpected obstacles that come with the territory.
Here are five solutions to some of the most common small-business problems.
1. Prepare for the transition from full-time employee to entrepreneur by developing a six-step plan. Best-selling author Melinda Emerson, also known as “SmallBizLady,” offers this advice on how to transition from employee to owner: Before you start thinking about your business plan, you need to create a life plan. “You must figure out what you want out of life first and then build a business that supports your personal goals for your life,” she explains.
In terms of building the business, you need to develop a financial plan, examine your skill set, figure out a marketing strategy (including your niche and target customer), and then create a business plan. The final step involves setting up your business — preferably while still working for someone else, Emerson says.
2. Minimize the problems associated with being the boss by preparing for them in advance. There are a host of challenges that come with being your own boss. How do you handle them? To stay ahead of the game, start thinking about things like networking, marketing, and your finances before you launch your business. Emerson recommends building your network at least a year in advance. In addition, focus on your target market, save enough money to account for the 18 to 36 months it often takes to break even, and be cognizant of your financial spending.
3. Prevent burnout by prioritizing R&R. Long nights and no breaks can lead to burnout. To stay motivated, Emerson says, it’s essential to make time for yourself.
“Your time is the most valuable thing you can give yourself and anyone else. Every three months, take two days off and unplug. Try reading something that has nothing to do with your business. At least one day a week, stop working at a reasonable hour,” she advises. “There’s always more work to do. Don’t let it rule your life.”
4. Avoid financial trouble by staying abreast of your finances. Being naive or in denial about your financial situation can break your business. Savvy bookkeeping is the only way to keep your company afloat.
“The best way to manage your business finances is to have your accounting reconciled monthly,” Emerson says. “By the 15th of the month, you should have a statement of cash flows, balance sheet, and a profit and loss statement, so you can make any adjustments and chase down your outstanding receivables.”
5. Overcome your fears of risk-taking by confronting them head-on. Being an entrepreneur is risky business. Every decision you make could potentially hurt or help your company. How do you deal with your fears so you can make the best decisions?
Emerson says it takes trusting your instincts, educating yourself about the pros and cons of your decisions, and getting a second opinion from another entrepreneur in whom you confide. You may find that, after directly dealing with an issue, what initially terrified you isn’t so scary after all. “When you develop a written plan and do your homework upfront, business opportunities don’t seem so risky,” she says.