6 tips on how to run a small business

Knowing how to maximise your time and resources is very important when running your own business. In this article, we’ll walk you through six useful tips on how to run a small business effectively.

As the saying goes, luck is opportunity met by preparation. And this is certainly true when it comes to running a small business. Often ‘luck’ has little to do with success, and the most successful business people have spent years working and planning their business activity to be where they are now. To set yourself up for success you should plan goals, finances and performance on an ongoing basis, but at least annually. 

By setting out goals, whether this is your first year in business or your tenth, it allows you to make decisions that can help you achieve your targets. If you are looking to grow your business, setting goals and plotting how you will get there is the best way to focus. It will allow you to spend your time on areas that will help you reach your goals instead of wasting what little time you do have on areas that will not reap as many rewards.

To start planning ahead you might want to write a business plan, or revisit an existing business plan. This will allow you to examine all areas of your business and highlight what your next steps should be to move your business forward.

While preplanning your activity is important, you also need to be flexible as a small business owner. If a curveball is thrown your way, such as an unexpected boost in sales, then you need to be able to pivot and use your resources in the most valuable areas to make the most of the situation. You could then spend more on marketing or buying more stock to capitalise on the sudden need in the market. 

As another example, you might find that a big contract or client falls through, which throws off your financial projections and might cause you cash flow issues. This might mean that you have to change some of your future plans so that you have more cash available to get you through this harder period.

Being flexible doesn’t mean jumping in blindly, though. It means that you need to look at your situation and make a measured and informed decision about what to do next to capitalise on the positives. All the while moving forward and learning from any negatives.

Financial planning is crucial in the long-term success of a business, because without it, you may encounter cash flow issues that prove detrimental. Understanding exactly what is coming in and out of the business bank account, usually shown in a profit and loss statement, will give you a better understanding of where you can improve. It will:

• Help you stay on top of small purchases because you will see how much they can add up over the year.
• Allow you to create detailed projections so that your small business can weather the quieter times as well as the busy periods.
• Highlight areas where you are spending too much, as well as areas that might be worth investing in more.

60% of businesses fail within their first three years, and one of the reasons why is because they don’t have enough visibility of their financial position. So don’t bury your head in the sand because you find the financials hard to understand. Instead, ask for help or get support from software or an accountant to ensure you always have a clear picture of the money side of running your small business.

When you run your own business it can be tempting to do everything yourself to save money. But it certainly won’t save you time. Doing this will make your expenses very low but it will mean that you don’t have time to focus your efforts on growing the business and gaining more customers. 

Look at how much time you spend doing tasks that benefit the business’ performance, then check how much time you spend doing jobs such as bookkeeping or admin. You might be spending a lot of time on these tasks because you don’t have the expertise to do them quickly, when perhaps they could be done by a free app instead. 

Once your business starts to grow, you could also consider outsourcing aspects of the business such as marketing, accounting or packing and shipping to an expert or agency. This frees up your time to focus on growing.

Always be on the lookout for ways to save yourself time or money. This could be something small like spending a little time daily to update sales records or invoices, so that you don’t have to spend hours doing admin in bulk. 

Or this could be a larger change such as examining your stock levels to ensure that you are wasting little stock and storing it as efficiently as possible. You might even find that there are other cheaper options for storage or that you can eliminate waste and damaged inventory by investing in recyclable or more secure packaging. 

It might feel counterintuitive to spend more in other areas, like the packaging example, but carefully consider what each investment will do for your business. You might find some ways to spend that will save you much more money in the  long term.

The phrase ‘if you build it, they will come’ does not always apply in business. You have to take it upon yourself to get your company out there and find customers that need your services or products. A couple of free ways to get started on your marketing venture are using social media and content marketing. Click to find our guides to help you through the process. 

Countingup, the unique two-in-one business current account and accounting app, makes it simple to manage your business finances.

The app provides instant invoicing and automated bookkeeping to save you hours of time-consuming admin, freeing you up to focus on growing your business.

Find out more here and take the first step to being more successful in running your business.