- Before starting a business, entrepreneurs should focus on preparing a business plan that outlines how they will create a competitive edge in the market and create profitable operations. All businesses need to have a set plan of operations that will achieve profits for the business and income for the business owner. Having a written strategy for achieving these goals, will help owners maintain a strong focus on creating a competitive edge and turning a profit on their business operations.
- Companies should start small and then expand as their operations gain market share. Low overhead gives a small business the flexibility to make changes if the industry changes or consumer demand begins to wane.
Additionally, outside financing should be kept to a minimum. The more cash injected into the business by the owner, the less paperwork and bank reporting early in the business. Most banks will also require collateral for bank loans, forcing the business to purchase acceptable assets for bank loan requirements.
Typical business agreements for daily operating facilities should be made in writing. These include rent, equipment leases and materials procurement. These written agreements will enable business to maintain their purchasing power and avoid price increases if their business quickly becomes successful.
- Most small businesses will need additional help. Properly staffing a small business can be difficult; hiring competent personnel at a decent wage is a tough aspect of business. When good employees are hired, focusing on retaining them in the business should be a priority for management. Replacing employees is an expensive process for most businesses; owners of small businesses can rarely afford employee turnover.
Using commission or sales-based bonuses can help employees work harder for the business, creating happy employees and a successful business in one step. Financial rewards also help employees to take ownership of their position in the company, creating loyalty.