Before You Start Your Own Small Business, Here Are 5 Helpful Tips!
You started your own business. You know the odds are stacked against new small business success. Governmental regulations, barriers to entry, insufficient capital, and dozens of other reasons make long-term success anything but certain. While your vision is fresh, before zest for the climb turns into fear of heights and exhilaration to exhaustion, these tips may be helpful to remember for your journey.
Tip #1: Be prepared to guaranty business contracts
Most commercial vendors will insist that you sign every single dotted line just below fine print on complex legally binding contracts. This includes facility and equipment leases, bank loans and even many vendors. Fully accept and expect this scenario to play out so often that it becomes part of the daily office routine.
Tip #2: You and a key stakeholder will have a bad misunderstanding
Although it’s not possible to know every “little” dirty detail in advance, difficulties are bound to arise at some point. The key to facilitating maximum future damage control is proactive neutralization by nipping potential confrontation in the bud, preferably before it even sprouts. Perhaps the best “prospective extermination” strategy is to specifically describe the terms and conditions of your relationship in an operating agreement, shareholder agreement, limited partnership agreement or other document before doors open for your first day in business together. It is much easier to discuss the fairness of possible termination of relationships when the parties are focused on the future working together.
Tip #3: The technical work and the business are different
Often a person enters a new business because the person is a good technician. The carpenter becomes a contractor, hairdresser a beauty salon owner, the list is endless. As often, the person believes understanding the technical work is equivalent to understanding the business that does that technical work. But the technical work of a business and a business that performs the technical work are two different things. A person who fails to see the difference converts the new business into just another place to go to work.
Tip #4: Prepare to wear all hats
To succeed in small business, you must become proficient not only in the technical side of the business, but also as a manager and entrepreneur. When wearing the entrepreneur hat, you have vision to turn trivial conditions into opportunities and the energy to set processes in motion to accomplish those opportunities. When wearing the managerial hat, you have the practical pragmatic talents to bring order to chaos. The manager plans, orders, predicts, measures, and problem-solves. The technician is the doer and accomplishes the plans.
Tip #5: Be prepared to remit payroll taxes as cost of being boss
Pay taxes. Withholding tax from your employees’ pay and sending it to the government is your obligation. Paying social security and medicare withholding taxes is your obligation. Paying local, state and federal payroll obligations is your obligation. Stay current and pay all amounts due, when due. Also, classify your employees correctly under the Fair Labor Standards Act.