Even if you’ve been in business for a while, it’s important for every small business owner to stop and review his or her company every once in a while. It is during these reviews that you will make critical decisions, such as whether or not your company will expand into new markets, or deepen its reach into the market that already exists. Here are some of the top questions that small business owners must ask themselves if they want to remain competitive in the long run.
1. Am I Passionate About My Product or Service?
The startup phase of any business is nerve-racking. When the preliminary returns are slim and the hours are long, you will find yourself questioning whether you’ve made the right choice. You’re also the principal salesperson for your establishment as the small business owner. At this stage you’ll be marketing to whomever you meet: parents, teachers, mates, bosses, all your friends, everyone in your family, landlords, real estate agents, members of your homeowners association, neighbors, professionals, electricians, plumbers, firefighters, police, nurses, doctors, bank tellers, bank managers, security guards, grocery clerks, mechanics, car dealers … you get the picture. Whether it’s top-notch legal services or handmade leather sandals, your passion for your product or service is frequently the difference that lands contracts, catches consumers, and draws investors.
2. How Can I Ensure That My Business Pays for my Personal Expenses?
No matter how many sales you plan to make once your business gets off the ground, you still have to eat today, so don’t imagine that it’s a waste of time looking at personal expenses like your rent or mortgage instead of working on a marketing strategy for your venture. One of the first things you need to work out is how much revenue your business must create for you to live on. In order to create this revenue stream, you may need financing to start up. Excellent sources of financing include friends and family, the SBA, and your banker. You can browse www.lendio.com for alternative sources of financing, or to get matched with financiers that best suit your needs.
3. How Can I Tell Where My Business is heading?
You might be wondering if your business is heading in the right direction, particularly if you’ve gotten past the critical startup phase. “Doesn’t my budget tell me where my business is heading?” you ask. The answer is, not quite. While a budget is your financial roadmap, you need to get into the habit of forecasting and projecting if you’re going to stay on target. Forecasting estimates your future results while projecting looks at trend and variance analysis to get a picture of where your business is heading. Both are indispensable planning tools for any small business.
4. Are All the Partners on the Same Page?
Too many companies start and flop because the partners are not all on the same page. When it comes to goods produced, size, staffing, location, etc., the business owners must have a perfect understanding of what the business is to look like. The philosophical questions of how the business is to be: core purpose, core values, ethical concerns, objectives, ecological matters, etc. are of equal significance, and these must be consistent with each owner.
5. Do I Need a Business Plan?
For pinpointing your objectives, and outlining your company, a business plan is necessary, and it functions as your organization’s resume. A marketing/promotional plan, market study, income statement, current balance sheet, and cash flow analysis are its basic components. It helps you apportion resources correctly, handle unexpected difficulties, and make the right choices.
6. S Corporation, C Corporation, Sole Proprietorship, Partnership, or LLC – What Form Should My Business Take?
Unless you have to issue both preferred and common stock (in which case you should form a C Corporation), it’s best to form your company as an “S” Corporation. LLC’s are common, but can be very intricate. Sole proprietorships and partnerships are to be avoided due to the likelihood of personal liability to the owners of the business.
7. Are we Attracting (and Retaining) the Best Employees?
Recruiting, coaching, and integrating capable workers can be very costly. Good managers are hard to come by, and it’s easy to lose your best employees to other organizations. On the other hand, the businesses that perform the best are the ones that hire and retain the best. What are you doing now to ensure your best employees stay with you?
Some of these questions can be asked before you set up shop, but all of them can be used to judge the continued viability of your business so that you will always be guided by reality. Don’t answer any of them too hastily, since, as with everything in business, they all demand thorough planning and serious consideration.