Planning to start a small business - read this first
December 11, 2006
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Before you start a small business, wouldn’t it be great if someone could give you a list of must do’s, and more importantly, things you should avoid doing at all costs?
Whilst this list is not exhaustive, I have learned from many mistakes!! You can learn from them too:
Plan - at least 2 year ahead, but preferably more. Plan where you want to be and plan your financials accordingly. Systemise everything - every single job/task etc - Read Instant Systems by Brad Sugars.
Don’t try to do it all yourself, you’ll burn out. Plan to recruit people, and do it. Read the Emyth by Gerber.
Recruit people before you actually need them and take your time. DO get references. If someone refuses to give a reference - it should tell you something.
Spend time training staff - don’t be too nice to them, or they’ll take advantage. Don’t be afraid to sack someone at the first sign of huge problems - you’ll live to regret it if you don’t.
Stay positive and don’t let your fears drag your business down. If all you can see is doom further down the road - that is what you’re likely to get. Think and Grow Rich by Napoleon Hill.
The best advice is the type you pay for - to someone with the knowledge to give it. Free advice is usually free for a reason.
Your accountants bill will be higher than they tell you. They will all quote about £500, but I have yet to receive a bill that low - bank on at least £1200 in your first year.
Don’t let up on marketing - even when you’re busy. Try to budget at least 10% of turnover on marketing, and test and measure everything.
Bank on being tired, poor, and seeing little of your family in the first year.
Avoid people who are negative in general and particularly those who are negative about your business - even friends and family.
Seek out people who are where you want to be in a few years time, and get as much advice from them as possible. Don’t be shy - most people are flattered by this and happy to give advice.
Don’t buy anything expensive that won’t make you more money in the early stages - and that includes flashy cars.
Keep in touch with your existing customers. Send a thank you card after you’ve completed the job, and send offers/updates regularly. Even if they don’t buy more from you - they’ll recommend you to others.
Don’t be scared to sack, or refuse to do work for some customers. Certain types of customer are not worth having, and you’ll develop a gut instinct for those types of customers as you go on. If you sell a service, get a form signed to say that the customer is happy with the work. If it’s a big job, get written authorisation as you go along. Remember, some people will do anything to avoid paying.
Adopt good credit control from the beginning. Add interest to late payers invoices, and a offer a discount to early payers. Don’t let anyone go over 60 days without paying.
Learn as much as you can about business, and your industry - try to become an expert.
Find out what your customers are looking for and find a way to fill that need.
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