Thursday Trim the Trash Time: July 13, 2017
What not to do as an owner
Good morning friends and welcome to trim the trash time here at Budget Boss. This week is all about small businesses and the keys to their success. Today I am going to speak about what not to do as an owner of a small business if you wish to be successful. There are many variables that go into running a small business and all should be given their due diligence. Be an owner is extremely difficult. You have to be an accountant, human resources specialist, marketing wizard, mechanic among many other jobs. Knowing what to do and when is often a mystery so today I am going to go over a small list of do not’s that will help you in your quest to run a successful small business.
1) Family, friends, and business don’t work
It is everyone’s natural instinct to hire or allow family and friends to get involved in one’s business. The problem is that the love for that person clouds your view of them as a worker. I have seen many businesses fall apart due to a rift between owners, many times who are related. If you want to hire a family member or a friend to work for you, you have to think of every possible scenario. The biggest question to ask yourself is: What if I have to fire this person? Would that ruin the friendship or tear apart the family. Chances are it would so why even go down that road.
2) Borrow your brains out
You cannot neglect cash flow if you are a business owner. It is everyone’s natural instinct to go into debt to start your own business. The problem with it is that you are adding interest costs into your monthly bill payments. This can become a problem when you have months where there is no money coming in, which is guaranteed to happen. Just like a personal budget, every business needs a budget as well. One thing I advocate is not having interest payments in your personal life, a business is no different. You might say: “Who has a ton of money around to start their own business?” Good question and the answer is not many people do. What you have to consider is all aspects of borrowing when starting a business. What are the terms of the loan? What will the loan do to you if you go out of business? Can you pay off the loan if you have the principle before the loan schedule is over? You have to think of the business as an investment and borrowing to secure an investment is leveraging. When you leverage you enter into a new realm so make sure you cover your bases. Cash flow is king so don’t ruin it by securing high-interest loans.
3) Do it all yourself
No one knows it all. Every smart person has a team of smart people around them. I myself rely on the intelligence of over 200 years of experience in the financial industry. Trying to do it all yourself can leave you exposed and overwhelmed. Make sure you hire good people but then also don’t micro-manage them. Give them space to grow, pay them properly and they will break their back for you. Doing it all yourself will break you and your business along with it. Trust those around you with their areas of expertise and focus on what you do best, being a leader. Also look into developing a mentor-mentee relationship with someone you admire. Successful people love sharing their insights and stories with those trying to make it in the world. A weekly lunch date with a mentor is a great way to discuss what is going on in your business and take advice from someone who has been there.
Understanding yourself is an important aspect of running a small business. Knowing your strengths and weaknesses in the areas of handling money, dealing with people and handling stress is vital. You have to make sure you are being the best you can be as well as surrounding yourself with the best people possible. You have to have an idea of what kind of business you want to run. I’m not talking about the business itself but instead of the vision of what you want your business to represent. This includes company culture, how you pay your employees and what kind of leader you wish to be. It is a lot to think of but that’s what owning a business entails. You have to think about hundreds of different factors, all of which could bring your business to its knees. Do your due diligence and stay current and you will succeed.
Thanks for reading my post today and don’t forget to tune in tomorrow for my final reflection on small business week along with my live broadcast recapping the week in Budget Boss. Have a great day friends!
“A leader is admired, a boss is feared.” – Vicente del Bosque
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Joseph James Francis is a Financial Advisor. You can find him on various social media platforms and at www.budgetboss.ca.