Daniel Rose’s top tips for Small Business

Small busi­ness is tough. It’s the indus­try where peo­ple work long, dif­fi­cult hours, often with­out rea­son­able com­pen­sa­tion. Work­ing for your­self isn’t always the dream it might seem.

It’s not all bad, though. Small busi­nesses often have some of the best growth rates around. I’ve put together a list of my top tips for small busi­ness, to help make your busi­ness run smoothly and profitably.

1. Plan for suc­cess and growth.

Right from the start you should plan for the suc­cess of your busi­ness, and for the future growth. Many small busi­ness oper­a­tors see plan­ning as some­thing that can wait. If you adopt that atti­tude, you’ll never be successful.

Regard­less of your size, you need to plan. If you want to grow, you need a plan that details how you’re going to acheive that. A busi­ness with­out a plan is a hobby.

2. Exer­cise cau­tion with finance.

Under­stand the dif­fer­ence between equity and debt finance. For those that don’t already know, equity finance involves giv­ing up some stake in own­er­ship, as often occurs with ven­ture cap­i­tal­ists. Debt finance, on the other hand, involves a finan­cial insi­tu­tion loan­ing you funds, whilst you retain full ownership.

I’m not a great fan of equity finance, but it does have a place in some busi­nesses. Of par­tic­u­lar note are those busi­nesses that require a sig­nif­i­cant cap­i­tal invest­ment. Often such a large amount of cap­i­tal may be not avail­able through debt financ­ing, and equity might be the only option available.

3. Invest in marketing.

This is another area where small busi­ness oper­a­tors often make the wrong choice. Too fre­quently they dis­card mar­ket­ing almost entirely. With­out mar­ket­ing, where will your cus­tomers come from?

I think the prob­lem stems from the con­fu­sion that adver­tis­ing and mar­ket­ing are one and the same. They are not. Sure, adver­tis­ing is a small part of mar­ket­ing, but don’t skip the rest. Use mar­ket­ing to under­stand your mar­ket, then develop and deliver appro­pri­ate products.

4. Spend time networking.

This is some­what related to mar­ket­ing, but is so impor­tant it deserves it’s own item. A great source of busi­ness (depend­ing, of course, on your prod­uct or ser­vice) can be local cham­bers of com­merce and trade asso­ci­a­tions. Become a mem­ber of these organ­i­sa­tions, and attend the many net­work­ing events that they offer.

There are a great num­ber of books on net­work­ing, but they prob­a­bly aren’t nec­es­sary. You’re there to build rela­tion­ships, enjoy your­self and get to know the other par­tic­i­pants. It’s all about the people.

5. Don’t hire staff unless absolutely necessary.

One mis­take often made by small busi­nesses is to hire staff too soon. It’s an easy thing to do. You get a taste of suc­cess, and start mak­ing some real money. Soon enough you run out of time and need an extra set of hands.

Inves­ti­gate every pos­si­ble oppor­tu­nity before hir­ing staff. Why? Because hir­ing staff adds a whole new layer of prob­lems to your busi­ness. You’ll now have work­ers com­pen­sa­tion, pay­roll taxes, employee retire­ment sav­ings and, to top it off, you have a con­stant expense that’s not easy to shed if busi­ness takes a turn for the worse.

Do you have your own small busi­ness tips or ideas? I’d love to hear them, so feel free to post a com­ment below.