Small business tips, tricks add up over 25 years
Twenty-five years ago, I said goodbye to my last boss, and started my first small business. Since then, I've owned four businesses — going through booms and recessions. I've hired, fired. I've raised capital, gotten bank loans, invested my savings. I've been challenged, engaged, tired and, occasionally, nervous. I've loved it — though, I confess, not every minute.
Looking back on those 25 years, what are some of the most important lessons I'd share with other entrepreneurs?
• Embrace change and be flexible. Successful entrepreneurs understand that change is going to come whether you want it or not. So build change into your business plan and into your outlook.
• Be positive. Your attitude really does affect your ability to respond to opportunities and challenges. So, even when times are hard, always be looking for ways to make the best of it.
• Treat your employees well. Your employees are your company, especially in a small business. Hire well and then pay them fairly; give them respect and authority.
• Don't be overly dependent on one customer, one channel, or one product. In 2007, my primary distributor went bankrupt. Fortunately, a few years earlier, I got paranoid about having so much of my income come from that channel and had started to diversify. I survived.
• Talk to your vendors. Your vendors can be partners in your growth, offering better prices, extending better terms, helping you develop new products, but only if they see you as working with them.
• Do it your way. You started a business to have more control, so make sure you're not blindly following someone else's idea of how to run a business.
• Develop and maintain good credit. Your ability to borrow money for your business depends on your personal credit score. I know you're going to use credit cards to help finance your business — I certainly did. But establish procedures to pay your bills on time every month, even if you aren't paying balances in full. Watch your cash flow carefully.
• Reduce your commute. I worked from home or within walking distance for more than 24 years, meaning I saved more than 100 days I didn't spend in traffic. Sure, I probably put all that time right back into my business working nights and weekends. But at least I wasn't commuting.
• Get things in writing. Believe me, I've done tons of handshake deals, but I've also seen clients change their minds and people I've trusted turn 180 degrees when things have gone sour.
• Establish personal savings and a retirement account. Like most entrepreneurs, I've plowed virtually every dollar earned back into my business. But unexpected things happen. So don't have all your net worth tied to your business.
• Get a good banking relationship. Let your bank know what's going on with your business. My bank has saved me at least once.
• Get involved in your industry. Even if you're doing everything new, there are some industry realities that you're just not going to change overnight. It's critical that you know what they are.
• Develop a business plan. Hey, I wrote a best-selling business plan book. What do you expect me to say• But truthfully, developing a business plan -- every year -- has been one of the most important reasons my business is still afloat, and I'm still happily and successfully in business 25 years later.Rhonda Abrams is the president of The Planning Shop, publisher of books for entrepreneurs.