November 22, 2019 Trends en_US How to run a business and avoid the pitfalls of new ownership

How to run a business and avoid the pitfalls of new ownership

By Lee Polevoi November 22, 2019

You know that saying about a dog chasing a car? One day, that dog catches the car and has no idea what to do with it. That feeling is all too common for many new business owners.

You may have dreamed of running your own business for a long time. Now, the moment is here, and that’s great. But, what happens now? Well, a lot.

It’s time to figure out what makes a successful business, well, successful. That way, you can prepare to run your own business.

How to run a business in 6 steps

No two small businesses are exactly the same, but there are some commonalities between successful small businesses. So, let’s get started on building yours. Follow these steps, and you’ll be on your way to running a great small business.

1. Set attainable goals

Before you do anything, it’s important to have realistic, attainable goals. These business goals should be concrete with little left to the imagination.

Think about what type of business you want to run. Then determine what business success looks like to you. Are you after money, or do you want to make a difference in your area? Is this business your long-term goal, or are you hoping to use it to fund a bigger venture?

Questions like these will help you create goals and milestones you can work toward. Goals can be things like “make $2,000 by the end of the first quarter” or “hire my first employee by month six.” Again, focus on realistic goals, as setting goals you can’t reach will only discourage you moving forward.

2. Identify your audience

Once you have a business idea and goals, it’s time to do some market research and figure out who your target audience is. Think about the types of products or services you plan to sell. Next look up competitors in a similar niche.

From there, take a look at their social media accounts and see what kinds of customers follow them.

You can also turn to local businesses in your niche or in a similar niche to see who their customers are. If you’re making any kind of handmade goods, farmer’s markets can be a great place to do some market research.

After you’ve identified who your competitors’ customers are, think about whether or not their customers would be the same ones you’d want. Is there something that sets your product apart, or are you going after the same niche? If so, what will make your business different from others in your field?

3. Create a business plan

With your audience identified and goals in place, you can move forward with a business plan. Your business plan should include an explanation of your business, financial model, decision-makers, startup costs, and more. (There are some great guides available that can help you get started.)

Not only will a business plan help you stay on track and give you a realistic idea of what to expect from your business, it can also be used to gain the attention of investors. Investors aren’t generally willing to throw money at anyone with an idea.

But someone with an idea and a concrete business plan to back it up? Now we’re talking.

While you can create your own business plan, you can also hire a professional. They can be costly, but that cost can make up for itself when you find investors and have a clear map to help guide your business.

4. Know your strengths

Ideally, you’ll one day have a super team to help your business achieve fame and fortune. But, until that day, you need to know what your strengths are and how you can play into them. Money may be tight in the beginning, so you need to really lean into your strengths in the early stages.

With your business plan completed, look at which areas you can handle yourself. If you’ve got some bookkeeping experience, for example, you can likely handle the finances for the time being.

On the other hand, if you need a website developed and have no experience with coding or design, you might want to consider outsourcing this task to a developer.

In short, you want to do anything you’re comfortable doing and hire help where needed. You may only need help for a short period of time, like in the case of getting a site developer.

The small cost of short-term help can pay off in the long run because it will free you up to focus on what you’re great at and help get your business off to a strong start.

5. Market your business

You’re likely pretty busy at this point, especially if you’re a one-person show. But, even the smallest amount of time spent on marketing can make a difference. So, this is the point where you need to start promoting your business and spreading the word.

If you haven’t already, create social media pages for your business and start building a following. These spaces can be great, free advertising and are a good way to let your customers know when a sale or event is going on.

You should also consider getting your website up and running. With a site, you can create content that helps establish you as an expert in your niche. This can draw in an audience over time and act as free advertising.

Lastly, having some well-designed business signs can go a long way when it comes to gaining attention and getting people in the door.

6. Build a team or support system

Once your business is in a financially stable place, consider hiring help. If you’re unable to afford any help, you should still build a support system outside your business.

Tap into your professional network and find some confidants you can lean on for advice and emotional support.

Early on, the support of your family and friends can also go a long way. Involve those you trust in your business, and let them be excited with you and for you. Who knows? You may be surprised to discover you have a relative with a valuable skill that can benefit your business.

10 common pitfalls for new business owners

Ask a small business owner what the hardest part of running a company is, and you’ll get a wide range of answers. Some people aren’t good at money matters, for example, while others don’t know how to delegate. But, just about every business owner has, at one time or another, experienced all of the challenges listed here.

Even the most seasoned business owners can get tripped up from time to time. Take heed of these pitfalls so you’re ready to sidestep them when they inevitably come your way.

1. Managing the transition from employee to business owner

There’s a world of difference between working at a business and starting one from scratch. Small-business owners must switch gears as they take on marketing, branding, financial management, and other duties. A big challenge is realizing that your responsibilities now apply around the clock. They won’t be confined to 40 hours a week (like when you had a “normal” job).

2. Being your own boss

In previous positions, you most likely answered to someone else. Now, you’re the boss, with the responsibility of handling everything related to the business. This means making a total commitment, sometimes at the expense of your personal life.

3. Focusing on the big picture

With so much to do when running a business, it’s easy to get “lost in the swamp” of small details and lose sight of the real goals of your company. The ability to develop a vision for the future is essential for long-term success, even when pressing daily tasks try to take your eye off the ball.

4. Learning how to delegate

Not having time for strategic thinking is directly related to many business owners’ inability to delegate the tasks they don’t have time to do themselves. In the start-up phase, most entrepreneurs handle everything on their own. Transitioning out of the “if you want something done right, do it yourself” mind-set can be difficult, but it will make your business more productive and profitable in the long run.

5. Hiring and leading employees

Feeling comfortable enough to delegate requires hiring the right staff for your business. Smart, dedicated workers are what every business needs, but the time and expense involved in the hiring process can be daunting.

Even when you recruit the right people, there’s still the challenge of effective leadership. As an employer, you must be able to motivate others, resolve conflicts, delegate efficiently and stay on top of the messy details involved in working with others.

6. Staying motivated

You work long hours, including evenings, weekends and vacations. All of your time, energy, and resources seem to go into keeping the business alive and well. Chances are, there’s no one around to thank you for all this effort. It’s up to you to remain motivated for the challenges — and rewards — ahead.

7. Making tough decisions

From the time you start the enterprise to the moment you sell it or move on, the decisions you make can involve thousands of dollars and affect the lives of other people. Some decisions will turn out badly. Others will move your business to the next level. The experience will likely make you a better person and stronger leader.

8. Facing risk

Every business venture involves risk. Not everyone has the stomach for this kind of thing — but you wouldn’t have built the business you have today without believing in yourself and your ability to confront and overcome risk.

9. Balancing work and family

There’s an elusive work-life balance out there, but many small-business owners can’t seem to find it. You build a business to enjoy life, but the demands of the enterprise often keep you from doing so. Having the right people in place and knowing how to delegate is often the best answer.

10. Knowing how to handle money

Many business owners don’t have a steady income. Instead, they experience ups and downs in revenue. You need to be skilled in sustaining cash flow. Without a strong business plan, you won’t necessarily know where the next dollar is coming from. Bad debts and slow collection are constant issues. Knowing when to spend money for expansion or equipment upgrades also requires skill and strong financial planning.

Like a boss

In no time, you’ll be running your business like the total boss you are. Stay calm, take your time, write an obscene number of notes and always be mindful of your goals. It’s easy to lose sight of the reasons you’re starting a business, so consider taking those goals and posting them on the wall above your desk.

You’ve already taken the first step by learning how to run a business. There are more than 30 million small businesses in the United States. Take the next step and be on your way to joining that growing number. We believe in you.

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Lee Polevoi is a business writer specializing in the challenges and opportunities facing small business. Read more