Small Business Owners
Rules of Thumb for Small Business Owners and Entrepreneurs: Surviving 2022 and Beyond
By Guest Writer, Virginia Cooper
Virginia Cooper is a retired community college instructor. She always encouraged her students to see the real-world value in their education, and now, she wants to spread that message as wide as possible. Her hope is that Learn a Living will be a go-to resource for adult learners embarking on starting, continuing, or finishing their education.
The year 2021 was hard, what with a rampaging virus, devastating natural disasters, and general economic turmoil and hardship. CNBC says 53% of small businesses are still in a slump and are not expected to recover until later this year. Fortunately, 2022 is proving to be a year of revival, a time of rebuilding after the storm has passed. The economy is doing better, the pandemic has subsided, and buyers are more optimistic.
If you’re a small business owner or entrepreneur, now is an ideal time to make changes to your business – and your mindset – to put yourself on a sustainable growth track. If last year taught us anything, it’s that disaster strikes anytime and only entrepreneurs with a solid footing and a well-rounded business can expect to survive.
Below, Into the Industry shares some critical guidelines you should consider abiding by.
Learn to budget
As of 2021, only 54% of small businesses have a budget, says Clutch. Entrepreneurs often underestimate the importance of a budget or just don’t spend enough time and effort documenting one. A budget is the foundation of the financial health of your business. Not only does it reflect the current state of affairs, but it’s also a useful decision-making tool. It allows you to identify problem areas, eliminate overheads, attract investors, plan strategically, and steer clear of debt. Learning the ins and outs of budgeting may well be the best business decision you’ll make this year.
Stick with your day job longer
Rome wasn’t built in a day. It’s going to take time for your business to pick up steam and make a tidy profit. And if you can’t afford to fund your business while it’s still getting settled, it’s going to fail. That’s why it may be a good idea to stay with your day job, if you have one, for longer. This will give you a steady stream of working capital until you can afford to quit, not to mention be a backup if your business doesn’t quite take off.
Give yourself security
Financial security is important, as is peace of mind. Choosing the right formal business structure can assist you in gaining both. For example, if you choose to form an LLC – the most popular option – you have limited personal liability. Any business debts you or partners run up won’t put your personal assets at risk. Further, LLCs offer less paperwork, more tax advantages, extra flexibility, and easier profit distribution.
Delegate
Delegation is an important time-saving tool. As the business owner or member of the upper management, you should be focusing on decision-making and niches you’re good at. Common day-to-day processes should be handled by other people. Besides saving you time, delegation allows you to shore up your weaknesses. Other people have skills and experiences you don’t and can be a boon in areas of their specialty.
Join the local chamber of commerce
Networking is essential for the business’s wellbeing and growth. One of the best ways to network is to join your local chamber of commerce. You’ll be able to hobnob with countless other businesses big and small here. By scratching each other’s backs, you can drum up more business, gain more exposure in the community, receive helpful advice, become more credible, and even influence local politics. It can be an excellent asset if you play your cards right.
Create an expanded support network
Creating, maintaining, and expanding a support network should also be a priority. A support network can be diverse – it could be your friends, fellow business owners, and more experienced mentors. Being a business owner can be an isolating experience. By being in constant touch with other people, you can stay in good shape mentally, share your burdens, and get emotional support. Further, a good mentor can prevent you from going off-track and find clarity on any problems you encounter.
Build your reputation
Your reputation is everything. Mention.com notes that 90% of consumers read online reviews before visiting a business, and 84% of them as much as personal recommendations from friends. You can generate many leads by having a stellar reputation – or you could lose it all by neglecting it. Some simple ways to build your reputation online are creating a professional website, writing a blog, claiming business listings, sharing testimonials, and proactively dealing with customers. Remember that treating your customers right and being consumer-centric will build your reputation naturally.
Set concrete goals
Yes, you want to be successful and generate a profit – but have you thought about how much profit, the avenue it’s going to come from, and the specific steps you need to take to get there? Eighty percent of SMBs don’t keep track of their business goals and, according to The Huffington Post, 77% haven’t achieved their vision for the company. If you don’t have business goals – and, ideally, a documented business plan –, then you won’t be going places. Create long-term service, social, profit, and growth goals, and then take specific short-term steps to get there. There are plenty of companies to draw inspiration from.
Create a relaxing environment
When setting up a business, having a place you can escape to at the end of the day is crucial. This is particularly true for those who work from home, as it’s often difficult to separate the two. So, carve out a little space in your home where you can relax, meditate, or practice yoga. Even something simple as placing a few houseplants in your office can help keep those stress and anxiety levels from becoming too much to manage.
Wrapping up
Don’t neglect yourself when taking care of your business. You are your biggest asset, and your business needs you in top shape. That means looking after your mental and physical health and maintaining a sustainable work-life balance. Entrepreneurship is a long-term commitment, so be patient with yourself and keep plugging away at your goals. With the right mindset and preparation, your success is assured.