When you own and operate a small business, you can get caught up in the pull to grow as quickly as possible. After all, more customers mean more revenue, right? Rushing to grow your company without having a strong foundation in place, however, can lead to some serious oversights. My team is constantly making sure we have our fingers on the pulse of the latest financial trends for small business owners, but we also know that the fundamentals for setting yourself up for long-term success are steadfast.
Here are five first-hand ways we’ve seen small businesses ensure dependable growth:
- Manage your books. As a small business owner, it’s easy to be overwhelmed with all the things you need to do to grow your customer base and sometimes the details get overlooked. Managing finances, not just before tax time but throughout the year is a must. Speaking of taxes, pay your taxes—every year and on time. A sign of a good, healthy business is one that has its books in order and files its taxes. If you don’t have the skills or the time to do this yourself, hire a bookkeeper.
- Plan your finances. Once you have the challenges of managing books and paying taxes under control, your business can start planning for the future. Knowing where you are financially allows you to make smarter decisions—like launching in a new market or offering new services. When planning for the future, however, be thoughtful about risk. You should always have a clear idea of your critical business needs, such as supplies needed for your manufacturing operations or staffing requirements, and develop contingency plans in case anything goes wrong.
- Build credit. As you’re building your business, you need to be building your credit. Doing so ensures you’ll be able to access cash when you need it and reduce your cost of capital. Looking to build your business credit? Here are 3 ways: The first one is to pay your bills diligently. The second is to secure a line of credit from an online lender (like BlueVine) or a bank and establish strong repayment history. The third is to get payment terms or a trade line from your suppliers and build a track record of payments Start now. Don’t wait until you need credit to start building it.
- Know your team. Having a reliable, supportive staff is critical to overall success, but don’t let it lure you into thinking that every day business practices are on auto-pilot. At the end of the day, you’re responsible for everything that happens—both good and bad. Make sure your team is trained and confident in their positions, but also make sure you know the ins and outs of everyone’s job.
- Make a plan. What do you want to achieve today? This week? This year? You’re a small business but you’re also a mighty one, and an easy way to show gains is by accomplishing milestones. Write your goals down and measure against them regularly.
Regardless of where you are in your journey as a small business owner—a seasoned veteran or just starting out— you must embody humility and seek support to make these five principles work for you. I’ve seen small business owners try to take on every task themselves, which almost always leads to burnout and an innovation dead end. Reach out to others for help. Solid fundamentals might fuel growth in the short term, but a strong network of peers and partners will allow your business to reach its greatest potential over time.