May is National Small Business Appreciation month. Our nation’s economy relies on the strength of small businesses. If you’re a small business owner or entrepreneur, the work that you do to ensure the health of your business is vital to the growth and health of our economy. Feeling pressure? Here are a few tips that every entrepreneur and small business owner should keep in mind as they pursue their aspirations.
Starting a Business
Running a business requires an emotional, professional and financial commitment. Though business ownership can be rewarding, there are risks involved. First, ask yourself why you want to start a business and understand what you will need to get started. Be honest with yourself about whether or not you are ready and realistic about the time and financial commitments. Next, figure out the basics like company name, where your business will be located and what products and services you will provide. Determine who your competition is and where you have the most potential for your business niche. Finally, draft a business plan to help guide you and then research potential funding sources.
Managing Your Business
Effective cash flow management is the key to maintaining a business. These simple steps can help your business move forward. First, you must maintain a healthy business flow; make sure the amount of money coming in exceeds the amount going out. Then, prepare a cash flow statement to stay organized. Next, try to predict your monthly income and expenses to anticipate or prevent cash flow shortages. It’s also important to determine your “burn rate” to know how long your business can sustain if no new revenue comes in.
Financing Your Business
Operation and expansion needs of a growing business often require additional financial support. A small business loan or grant can help you bridge the gap. First, research your funding options. Determine if your financial need requires a small or large investment. Small investments can be supported by opening a new line of credit as working capital to manage your cash flow. Large investments often require applying for term loans such as business, commercial or SBA loans. Knowing your options can help you determine which funding source is best for your business.
Protecting Your Business
Protecting your business is a good way to continue business growth. Review your most valuable assets and make the proper steps to protect them. Start by updating your insurance policy yearly so that it grows with the business. Continue to meet the evolving needs of your customers to increase revenue. Attain, retain and motivate your talent to assure business productivity. Watch your financial indicators to look for ways to boost performance. Protect what you’ve built with a long term plan for retirement and succession. Follow these steps to protect your business on all ends.
The Wells Fargo Business Insights Resource Center is a free online resource that provides a repository of articles, videos, expert advice and other information to help you be successful at every stage of business.
This article has been prepared for informational purposes only. The accuracy and completeness of this information is not guaranteed and is subject to change. Since each individual’s financial situation is unique, you need to review your financial objectives to determine which approaches might work best for you.
© 2013 Wells Fargo Bank, N.A. All rights reserved.
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