But unfortunately, many small business owners think like "small" business owners. Your business is just a smaller version of a big business. So, you will likely have to consider the same issues, but on a smaller scale, and with a whole lot less financial and human resources. But bottom line is, if you don’t consider a range of areas, you are setting up yourself for failure, or at best, you are not optimizing the potential of your business.
Watch this video below to find out how to take charge of your business by finding and trusting four key people.
Don't have time to watch this video? Scroll through the tips below:
Successfully operating a small business is not only about taxes, nor even about understanding your business finances (though, being a Chartered Professional Accountant, I would like to think the world revolves around financial statements and tax returns).
No matter the type of business you operate – restaurant, law practice, medical practice, clothing store, online sales, trucking company etc., there are many factors to consider, including:
1. legal issues,
3. use of social media,
4. incorporating technology in your operations,
5. cash flow financing and management,
6. managing employees,
7. managing business day to day cash generation operations.
It is not expected that a small business owner will become an expert in every aspect of his/her business, but it is expected that he/she will recognize those situations when expert help and guidance is required before they become situations over which there is little to no control.
Every small business owner must have the following key personnel as part of their advisory inner circle – a lawyer, an accountant, a financial advisor and a business coach. These persons are not to be seen as mere service providers whom you call on periodically to complete a specific task. They must form your inner advisory circle. Their expertise must be tapped into for advice and /or strategic counsel regarding your significant business decisions, to ensure that all consequences of the business decision are brought to the fore, before it is acted upon.
So for example, if you are considering significant renovations/repairs to your business location, here is how you tap into your inner advisory circle:
a) Business coach – this is the person with whom you must extensively discuss and agree that based on your business plan and desired growth strategy, it is indeed the most opportune time for your business to expand.
b) Accountant – this is the person with whom you who will crunch the numbers to see if you can indeed afford the expansion. If required, the accountant can prepare a business plan to support any bank financing you may need for the expansion.
c) Lawyer – this is the person with whom you will discuss whether there are legal issues you need to consider as you undertake this activity – eg., review of supplier contracts, liability issues.
d) Investment Advisor – this is the person with whom you will discuss how the expansion will impact your personal and business financial plan/investments. Will it increase the value of your business, thereby positively impacting your retirement income?
Small business owners might be hesitant to develop and tap into an advisory circle due to the perceived financial cost. However, cost should never be a deterrent to seeking out good and useful information. Here is how a shrewd business person starts to develop their advisory council with a very low financial cost: Look out for solid, relevant and free business information sessions. Check the background of the presenters to ensure that they are credible. Attend the sessions, and be prepared to ask your burning questions. If you are comfortable with their answers and personal style, get their emails, and follow up with them. Once you have had a couple of interactions, and you feel a personal connection with the advisor, it is now time to have a discussion on how convert to a more formal, longstanding and mutually beneficial relationship.
There is a big difference between building a business and just monetizing your service/product. The former creates generational wealth, whilst the latter allows you (hopefully) to make enough money to take care of life’s necessities. Take charge of your business if your goal is to create generational wealth.