Running a small business is a fantastic opportunity to develop an idea and provide the business owner(s) with an income for all their hard work and investment.
Running a small business is a fantastic opportunity to develop an idea and provide the business owner(s) with an income for all their hard work and investment. Further, it may create opportunity of employment for individuals who have the skills to help further develop the business. As with any process, sometimes things will not go as smoothly as they could. It is therefore sensible to consider certain factors that should not be avoided and tackled to ensure the business goes from strength to strength.
If you have a business partner it is sensible to have a written agreement in place detailing who has responsibility for certain activities and what fees will be apportioned to each of the activities. It may be that there is an equal split, if this is case and any money/profit is shared equally then this is fine. If not, problems will undoubtedly occur.
Protecting your brand/IP.
Following all the hard work researching and preparing/securing new products, it is important to ensure that appropriate security is put in place to stop competitors for immediately copying or stealing your identity or products. This is a huge challenge for small businesses who may find larger organisations are able to muscle in and cherry pick what they see as a ‘good idea!’.
Legal disputes with competitors/employees/suppliers.
Following on from the point above, you may also require advice on how to resolve disputes as quickly and as effectively as possible without it costing the earth. Having Contracts of Employment in place for employees is a must to ensure they understand the rules of the organisation. With regard to competitors, this is trickier, having appropriate insurances/trademarks/copyright etc. will certainly help. With your suppliers, make sure you understand their terms of business – always read the small print!
If it is wholly justified, give them their money back as quickly as possible in order that the problem goes away. If it is not justified, say it is not and seek legal advice as necessary. Keep your eyes on social media/reviews in case anything is being said about your company that is derogatory. Challenge for the removal of any negative comments as appropriate.
Pay your bills on time along with your taxes, ensure that pension auto-enrollment is arranged as per employer’s obligations, maintain up to date insurances. Seek legal advice, whist it is a cost, it can pay dividends. Joining an organisation such as a Chamber of Commerce could be a good option for obtaining advice.
Make sure that you pay your suppliers on time and that your customers are paying for their goods/services within a suitable timeframe. Try to find a compromise, only take legal action as a last resort, if you do, you could end up needing new suppliers and new customers. Also, what seemed like a good deal (or the best deal you could achieve) at the outset may not be as good a deal a year or two later. Ensure that you are able to change suppliers if the need arises and that you do not have all your eggs in one basket. If supply is turned off for whatever reason, you need a fall back plan. Spreading the risk with a couple of suppliers can be helpful even if one supplier is charging slightly more.
Premises/Equipment lease deals.
Taking on a lease against a property/equipment that is suitable today and may not be suitable tomorrow can be a problem. Businesses need to be able to able to expand and contract, based how they are doing in the marketplace. Starting in flexible rented accommodation such as serviced offices can overcome this problem. Having a good relationship with an equipment supplier, likewise.
As the business grows it is likely that new staff will need to be hired. Try and recruit talent rather than staff as this will help to grow the business more effectively.
In today’s ecommerce world, it is vitally important that your IT infrastructure can keep pace with the changes and demands of business. Added to this, ensure that your IT security is as up to date as necessary to limit the amount of unscrupulous individuals who take pleasure in disrupting business for their own ends.
Don’t spend all the reserves, save some for a rainy day, it’s obvious!
Business terms and conditions.
Make sure you are reviewing what the business costs are against the sales to ensure that the margin remains appropriate. Update your terms and conditions periodically and inform your customers/suppliers in accordance with the agreements you have in place.
If you are interested in learning more about starting a business or would like to gain further knowledge of exactly what would be required, why not study our Business Start-Up Course? This course covers all the main areas involved when starting up a new business.