Every business owner, whether seasoned or newly launched, remembers their opening day. That pride of having your name on the door, of seeing your shelves fully stocked, of ringing up your first sale.
But then time passes, the newness wears off. Walk-in business slows to a crawl, the roof springs a leak, your one and only employee quits to return to college full time. And then there are those rumors of a deadly disease. Should you be worried about coronavirus?
Welcome to the real world of small business management … where launching a new business is a thrill and managing one from day to day can be a colossal headache. Yes, it’s tough, but not impossible if you commit to proactive management from the start.
Pay strict attention to cash flow daily
To succeed in business, you must make cash flow your No. 1 priority. A positive cash flow is a sign that your liquid assets — cash or anything readily convertible to cash — are rising and your business is growing.
If you do not have enough cash in your checking account to pay monthly bills, act now:
- Establish a line of credit with your bank to help you weather seasonal ups and downs and the occasional crisis. You’ll pay no interest charges until you draw on it.
- Age your accounts receivable. Group them as current, 30-60 days and over 60 days; don’t let unpaid accounts linger. Contact every customer past due by 30 days; consider a collection agency for those past 60.
- Negotiate longer payment terms with suppliers. This can come in handy when ruined stock needs replacing unexpectedly.
- Keep track of when your expenses come due — monthly, quarterly, annually. Create a written payment schedule and plan accordingly, so you won’t be caught short-funded.
Hire good people.
Many small businesses open as single-person operations — the owner does everything. This can work well for a while, but at some point, you may need help — a full- or part-time employee with regular hours and specific duties; an in-house gig worker to handle miscellaneous tasks over a specified number of days or weeks; or an off-premises freelancer who completes and delivers assignments.
By developing a written job description of key responsibilities for any position you want to fill, you’ll be better equipped to find the right kind of help quickly, screen applicants and, later on, evaluate their job performance. When you’re ready to begin looking for job candidates, keep these tips in mind:
- Ask friends, relatives and business associates for suggestions.
- Search online using reputable job placement tools such as CareerSource Florida’s Employ Marketplace, and Indeed.
- Tap into industry association websites.
- Monitor specialty job boards.
- Hire a staffing agency.
Make a list of the stand-out applicants and screen them initially by phone. Identify strengths and weaknesses; probe for qualities specific to the job you want to fill, such as leadership skills and work style. Then narrow your choices and invite the candidates who performed best by phone to your workplace for an interview. Hire the one with the skill set you desire and whose temperament best fits your company.
Retain valued employees.
Finding the right employees is tough and time-consuming. To hang on to them:
- Establish clear goals. Employees can’t please you if they don’t know what you want. Strive to provide clear instructions; be available to answer questions.
- Coach, don’t manage. Employees like to be empowered. Let them take responsibility for the tasks you have assigned; in return, be ready to deliver positive reinforcement.
- Make it “easy” for employees to work for you. Listen to their ideas. Encourage them to stretch. Be flexible about sick days and family responsibilities.
- Reward them. Not just in their paychecks, but with something more personal, like a handwritten note or a shout-out before other team members for a job well done.
- Let bad employees go. Not everyone is a good fit; don’t hesitate to get rid of bad employees before they chase the good ones away.
- Delegate responsibility. When you’re just starting out in business and pinching pennies, it’s tempting to try and do everything yourself. But when juggling customers, calls, bills, orders and whatever else it takes to run your business becomes too much to handle, turn one or more of these responsibilities over to someone else. Just remember: You are the boss and ultimately responsible for the well-being of your business. Keep tabs on your finances and know about any relevant changes to the tax code.