Quick tips for Small Business

Quick tips for small business owners:

Tips for Small Business

?Sanjib Subba

Small businesses are always on the run and face multiple challenges. The crisis such as the current one is actually could kill millions M/SMEs across the world.

Here are some of my life lesson which may not be directly relevant now yet could help provide some thoughts for future planning. These are very limited tips as I do not wanted to make the reading too long hence questions if any kindly comment.

The company I ran for about 10 year until recently was also in small business category. The only difference was ownership structure which was all institutional. 

From day one, year one I told myself that I must run this company in a true entrepreneurship manner. So, the mantra I embraced and practiced was:

1.    Dirty your hands: I realized to run any business you must show your presence, get engaged and involved. Pay attention to the dirt on tiles of toilet to trash at kitchen to lights at reception, unused or overused AirCon to track each and every penny that is debited/credited from the account. Delegation is not enough when not empowered and not taken risk on people. Take risk on your people, delegate, empower and yet keep constant watch. You must stay relevant at all times.

2.    Build your Brand: Its not an overnight journey. Takes lot of creativity, passion and enthusiasm particularly when you have a Zero budget on branding. True to that our branding spending was almost zero for 10 years yet we managed to make our presence felt where required.

Understanding your audience is key to your Branding journey so you are able to create right impact where it matters. Ensure you are channeling your energy in right branding strategy that fits with your business line, does not dent on your resources and is sustainable.

3.    Fiscal Discipline: This must start from the top. Collecting pay check without revenue generation and healthy bottom line never satisfied me. This could be true to most of us who are on payroll yet I then told myself this is a small company and may remain somewhat small for a long time to come. We must plan for future from the day one so at one hand I focused myself on generating day to day revenue, cost control and also started putting aside certain surplus for rainy days. The company has much better cushion now to see through not only rainy days but years.

Most small businesses do not have fiscal disciplines and tend to use revenue as net profit hence could run into major financial trap. Also, many do not understand between receivables and cash at hand or payables. Your sales until realized is not real cash hence while you drive the sales ensure receivables are being collected on time. Give incentive for cash collection and early realization. Quick cash turn around is always better and help you manage finances better.

Set aside bank installments, taxes and other payables in time. Prioritize what to pay first. I focus on taxes, salary, bank loan and other payables. Ensure your receivables and payables cycle match or else you could run into major cash flow mismatch.

4.    Innovation is not rocket science. Every business must evolve, think & look beyond. Time, audience, expectations will not remain same. Businesses must stay relevant and to stay relevant you must transform. Create a pool of products that has short, medium and long shelf life. The mix would allow you to have well balanced portfolio and sustainable source of revenue. If you were to focus on only a product or line then ensure you deliver best. Best raw materials at low cost, low processing cost, redundant inefficient process and systems, price it right, create efficient distribution channel amongst others.

5.    Build a team of Empreneurs (Employee+Entrepreneur). Business is a business and will never survive on bureaucratic system and rules alone. The agility is required to have continuous move and improvements.

The challenge is your ability to pay and retain talents and this is always true for small business. The strategy could be A) Recruit young talents and keep the supply pool active so when they move out you have ready pipeline. B) Train and engage, correct them, invest on them yet accept they may not stay long.

6.    Spin off: Every product and service have shelf life hence businesses must continuously evolve and reinvent itself. Improved product in new packaging, by-products, your wastage could be raw materials for someone else, their finished product could be your raw materials etc

7. Scalable: The challenge for every business whether big or small is to continuously grow. Yet the question is how far and how fast. Competition is catching up, product shelf life is deteriorating, margins going down, costs are going up are some of the uphill tasks small business face yet you must serve to grow and sustain against all odds. If you are not growing at an industry average rate then you must evaluate the reasons. 

I welcome your comments and feedback.