Having now worked in Practice for over 20 years, I have supported and advised many business owners, across a range of industry sectors. I have experienced over this time, many different styles of management, and learned a lot about what makes the best businesses tick. Consequently, I decided to review the key areas of strength exhibited by the most successful business owners, and this has lead, to what are in my opinion, the 5 essential business tips for SMEs and start-ups.
In summary: –
- Business plan
- Cash flow management
- Time management and staff
- Growth and expansion
Any business, whether just starting up or established, must always continue to have that understanding of why it exists and to whom it serves, whilst also having a clear forward-looking vision of where it wants to go.
A business plan aims to address the key questions that any owner must continually ask. Whether that’s a start-up looking to attract funding to get the business off the ground, or a developed business with a strong credit history looking now to appraise and reconsider its strategic direction, or even just to reconcile and re-affirm its model on why it exists at all.
Even if just a brief summary with supporting key financials, a business plan is a valuable internal tool.
Cash flow management
The first key concepts of business I learned that stuck, was probably “cash is king”. Cash for any business is vital, but more so for SMEs and start-ups. It’s easy just to focus on driving revenue and looking only at the profit figures, whilst completely ignoring the perils of insufficient cash resources.
A regular, updated cash flow forecast, will aid the recognition of potential problems which may arise in the periods ahead, and help businesses make the necessary decisions as early as possible to rectify funding issues, if possible.
Profits are the driver and incentive for anyone entering into business, but cash management is crucial to ensuring employees and suppliers can be paid, so operations can continue to produce those goods and services needed to generate the revenue, and the returns sought on those assets invested.
Time management and staff
How are your organisation and self-management skills? Both being necessities for running a business and managing others. Good business owners lead by example and demonstrate great leadership through their conduct, communication, and setting the example. Time is a precious commodity, and ensuring you are free, as a business owner, to carry out only the tasks you should be focused on are crucial.
Therefore, at some point, it will be key to hire the right team, and to create a pro-active environment. Building a team that can reason with you and illustrate the potential issues with a certain strategy or plan. They won’t always be as dedicated as you, but having the correct attitude is crucial. You not only need to find the right people, they need to be kept involved and motivated, and remunerated properly. You need to listen, acknowledge, and involve them in the decision-making process. An engaged employee is a better, more productive one.
This is one of the most crucial business tips for SMEs and start-ups as without a solid and trustworthy team you will struggle to grow your business.
Are you giving your customers what they want? Continue to assess your customers’ requirements, and ensure that you continue to meet them, whether it’s the product or service, but also how that is being delivered.
Nurturing relationships with your customers is an important aspect to growing a successful business. Particularly in an age of automation and innovation. Caring for your customers has never been more valuable.
Also, as equally important, are you continuing to assess whether there is too much dependency on a small percentage of customers’, and the exposure risks associated with that. An area that should not be overlooked.
Growth and expansion
Initiating and encouraging growth can be a real challenge for a business, as can controlling it. You do not want the focus to be all about growth, and for expansion to get so out of control that it creates too big a demand on the company’s resources. This inevitably can lead to poor customer service and ultimately, lost business.
Don’t worry, I can count, but I cannot finish this blog without mentioning the importance of a good accountant. For tip number 6, an accountant should be someone, who not only prepares the numbers, but will actively seek to take an interest in your business, to listen, understand and provide an objective view and opinion. To ensure these key areas have been thought through and considered in full. They will seek to help business owners achieve their goals by assisting to remove these barriers to performance, and releasing the potential in your ideas and concept.
This provides a basic outline of the essential business tips for SMEs and start-ups, and concluding on the role a good accountant as a professional advisor would play, and that of the key business areas on which they can advise, support and address.
If you require any advice, whether you are just looking to start up or are a current business owner, please contact Roy at Raffingers.
Roy Butcher is a Partner, and Corporate Finance advisor at Raffingers. Contact: firstname.lastname@example.org.
For further business tips for SMEs and Start-ups, visit our SME sector page.