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Starting a Small Business

By Stacy L. Bauer

The Small Business Administration advises that one of the major causes of failure of small businesses is poor management. This could mean poor planning, cash flow management, recordkeeping, inventory control, promotion or employee relations, among others. It likely also includes poor capitalization. There are several key steps for starting and managing a small business, as follows:

You may come up with an idea and begin discussing it with your friends, family, professors, and other business people. At this stage you need a business plan, which is a detailed written statement describing the nature of the business, the target market, the advantages the business will have over its competition, and your (the owner’s) resources and qualifications. The business plan forces you to be quite specific about the products or services you intend to offer. It requires that you analyze the competition, calculate how much money you will need to start, and cover other details of the operation. It is also a must document for talking with banks and other investors.

A good business plan takes time to write, but you’ve got just five minutes, in the executive summary, to convince your readers not to throw it away. Next comes an outline of the comprehensive business plan. Remember, there’s no such thing as a perfect business plan, it will and should change as the business changes and grows. Getting the business plan into the right hands, finding funding sources, requires research. The time and effort you invest before starting your business will pay off many times later. Remember, the big pay off is survival.

The next step is financing your business. After your personal savings, friends and family are often the next source. Additional sources of funding can include banks and other financial institutions, angels, crowdfunding and venture capitalists, the Small Business Administration (SBA), the Small Business Investment Company (SBIC) Program, and a Small Business Development Center (SBDC). Once you have planned and financed your business, it’s time to get it up and running.

Step three is knowing your customers/market, which consists of people with unsatisfied wants and needs who have both the resources and willingness to buy. After identifying the market and its needs, fill those needs. Offer top quality at fair prices with great service. Not only do you want to get customers, but to keep them as well. Small businesses have the ability to know their customers better and adapt quickly to their ever changing needs. To best know your customers, LISTEN. Don’t let yourself get in the way of changing to meet the wants and needs of the customers.

As your business grows it becomes more difficult to oversee every detail, thus you must hire, train and motivate employees. Yet it is difficult to find good employees when you offer less money, skimpier benefits and less room for advancement than larger companies do. This is one of the reasons that good employee relations are a key to small business management. Employees of small companies tend to be more satisfied with their jobs than their counterparts in big companies because they find their jobs more challenging, their ideas more accepted, and their bosses more respectful. Employees who feel they are part of the team work to make that team, and thus the company, successful. Don’t fall into the trap of promoting employees simply because they have been with you the longest, or are family members, but aren’t qualified to serve as managers. You need to delegate to the most qualified individual(s). You may be best served to fire those who don’t meet your requirements, regardless of their tenure and regardless of family relations, so that you can recruit and groom employees for management positions who you can rely on as you delegate more of your responsibilities.

Small business owners often say the most important step in starting and managing their business was in accounting. Setting up an effective accounting system early will save you a lot of headaches later. Accurate record-keeping allows you to follow daily sales, expenses and profits, and also helps with inventory control, customer records and payroll.

Many businesses fail as a result of poor accounting practices leading to costly mistakes. A good accountant can help you with tax planning, financial forecasting, choosing sources of financing, and writing requests for funds. The key is to find an accountant experienced with small businesses. This critical advisor can help you to not only survive, but also to thrive.

Small business owners have learned, often the hard way, that they need outside advisors, especially early in the process. This includes legal, tax and accounting advice, and also marketing, finance and other areas. A necessary and invaluable advisor is a competent, experienced attorney who knows and understands small businesses. We can help with leases, contracts, operating agreements and protection against liabilities. A marketing advisor is also key and should help you make your marketing decisions long before you introduce your product or open your store. Market research can help you determine where to locate, who to select as your target market, and an effective strategy to reach it. Experience with small business marketing can be enhanced if this advisor also has experience with building websites and using social media. Two more critical advisors are a finance expert and an insurance agent. The finance guru can help you design a business plan and provide valuable financial advice, and an insurance agent will explain the risks associated with a small business, and in your industry, and how to cover them most efficiently with insurance and other means. And finally, don’t forget to seek out other small business owners and discuss and exchange ideas.

Both BauerGriffith attorneys and BG Consulting Group consultants serve as trusted advisors. Let us help you get your business off the ground.

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Leadership Through Change

Your business’s ability to change in response to today’s rapidly shifting climate is crucial to its survival. Do you have the resources you need to lead the change you require? BG Consulting Group’s unique suite of competencies supports development, socialization and management of your change strategy. Test your readiness with our three-minute video. We welcome your call to schedule a brief introductory discussion around how we can help you succeed.

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Why You Need a Great Accountant on Your Business Team

By Nancy Hancock Griffith

Whether you’re operating a for profit or a nonprofit enterprise, you need a great team of advisors helping you out. Surrounding yourself with people who are not only there to answer the questions you ask, but to ask questions you haven’t thought of yet is key to your success. And one of the most important team members (next to your BauerGriffith attorney, of course!) is your accountant.

Now when I say accountant, I mean more than a bookkeeper, or someone to fill out your tax returns. Both of these skills are very important, but there are so many opportunities to save money and structure your business for success that many business owners miss without the savvy advice of an accountant.

Here are just a few key issues to think about:

  • Are you paying and collecting sales tax when you need to, and only when you need to.
  • Have you classified your workers properly as employees or independent contractors, and how can making a few tweaks to the way you work with your staff potentially save you a ton of money.
  • Are you capturing all the possible business deductions you can for expenses.
  • Are you classifying your expenses properly to capture all possible depreciation for your building or capital purchases (think desks and chairs, not just buildings and large equipment).
  • Are you monitoring cash flow on a monthly basis, even when some expenses are paid annually.
  • Are you budgeting for hidden expenses like credit card processing fees and employee related taxes.

Of course, the list goes on. Practically every business of every size needs to examine these issues in advance of closing the year-end books to make sure every advantage is captured. If all your accountant is doing for you is telling you how much to pay the IRS, then they’re not doing enough. So add this important team member to your list of advisors now to make 2020 your best year yet.