What does it take to be a good entrepreneur? A small business’s guide
PARTNER: Jobber Academy
The idea of running a successful business and making profits, in the long run, can entice any entrepreneur to start a small business and watch it grow with time. However, not all businesses become successful, and this is not for lack of trying. Running a business is so much more than just investing your money and selling products or services to available customers.
Entrepreneurs need to quickly become experts in every facet of their business such as market research, pricing, marketing and customer experience. It’s often important to be flexible and highly strategic so that time is spent in the most efficient and productive ways. With the right tactics and tools (and a bit of luck) you can start a small business and watch it grow. This article will discuss what it takes to be a good entrepreneur:
Manage your money
One of the biggest contributors to business failure is a lack of proper financial management. This is where businesses can make profits on paper but can’t pay their bills on time, are unable to get paid on time, and overpay for goods they’ve purchased, taxes, and loan interests. By failing to manage the accounts correctly, revenue doesn’t flow regularly enough to keep operations stable and steady.
As a good entrepreneur, you need to stay organized in managing your finances, or find someone else with the skills to do this for you. The first step is in managing the invoicing process and ensuring you get paid on time. This free printable job invoice template from Jobber lists items and total prices, and can be converted into an invoice and sent to customers after a job has been completed or price agreed.
Accounting or business management software is highly advisable to easily track balance sheets and profit-loss statements to help with financial reporting. A solid accounting system will put you in a strong position to address where profit margins can be enhanced or where expenses need to be reduced etc. Essentially it enables you to make informed strategic decisions for the better of the business.
Never stop learning
As an entrepreneur, having an open mind can be your most powerful tool in business. Unlike most people who give excuses as to why things shouldn’t be done or haven’t been done, entrepreneurs should always be looking for innovative ways to make things happen. Ask yourself questions like what is stopping you from achieving what you want to achieve, what steps are needed to get where you want to be and how you can overcome the hurdles to get what you want.
One way to learn is to get first-hand experience from seasoned successful entrepreneurs. Invest in the time to read up on what has helped other entrepreneurs get where they wanted to be. This list of best books for entrepreneurs is a great place to start. Every new business owner has a different experience and story to tell. The more you tap into these resources, the more valuable tips you’ll pick up and be able to apply to your specific situation. Alternatively, you may want to find a business mentor who has already been through a similar journey. You can learn directly from their experiences, successes, and failures so you can identify more easily where to improve or focus your attention.
Invest in insurance
Setting up a new business comes with huge risk. While the risks can’t be avoided, they can be mitigated. Every decision an entrepreneur makes comes with some level of risk, hence you need to be prepared to handle these as they arise. The best way to do this is by buying insurance appropriate for your situation. Consult an insurer or a financial advisor on the best way to protect your business.
Insurance policies can cover businesses against perils, such as theft and natural disasters. They can also cover against financial loss. At the very least, protecting yourself in this way can give you peace of mind if it all goes wrong.
Determine your business legal structure
Your business should operate under the law, which means you have to determine its legal structure. The legal structure will determine how you file your taxes and personal liability in a financial or legal dispute.
Typically, businesses can take one of the following legal structures:
Sole proprietorship: Registering your business under sole proprietorship means that you’re responsible for all obligations in your business. Your assets and your businesses assets aren’t separated. So, in case of any financial dispute involving your business assets, the personal assets can be affected as they aren’t protected.
Limited liability company (LLC): LLC protects your assets by separating them from your financial assets. In a financial dispute, the two aren’t treated as one entity.
Corporations: Corporations, which can either be S corporation, C corporation, or B corporation, will help separate your liability from your business liability. The legal structure of corporations makes a business a different entity from the owner. Hence, the businesses can pay taxes, sue, or enter contracts as individuals.
Partnership: Entrepreneurs can also start a business as partners. In this scenario, they’re held liable as business owners in case of a dispute. Usually, people choose to go into partnership if they complement each other and work together to make the business flourish.
Conclusion
Starting and running a business can be challenging, and unfortunately, in the early days it can be all too easy to fail. As an entrepreneur seeking to grow your business, try to avoid making financial mistakes that so many before you have made. Research, learn from others and invest in a professional accounting software system to support you. You can be one of the lucky ones and reap the rewards as you embark on the journey of your new business.
