Within the experience I have acquired in the family business, over time I have learned new things that have helped me to reinforce the knowledge I gained during college and expertise online. Undoubtedly, how to manage a small business it is one of the major issues for all types of entrepreneur, as they often have to act on pure instinct and rationing because there is no one else you lead the way. In the end, that’s what makes entrepreneurs what they are, leaders showing the way and direction of an organization to make it successful.
I write this post to make it a help anyone entrepreneur or small business owner. For perhaps resolve some questions that are perhaps seeking to answer. The success of an entrepreneur requires key elements. It is not easy having to deal with everything that surrounds a company. From suppliers, employees, and customers to finance inventory management, equipment, care Store, image, advertising, etc. These are issues that can stress and be a total headache. So you should pay attention to at least reduce that stress, and focus on solving problems that flow naturally and you can easily solve. There will always be problems for an entrepreneur, and your ability to get rid of these obstacles will help to improve day by day.
I leave here my experience on how to manage a small business.
How to manage the business cashflow
Managing cash flow for a business may sound very complicated if you do not have basic knowledge of management. Many phrases as “I have no money”, “not enough to pay me”, “I need more time to pay the supplier” etc, are very common to hear among small business owners. Surely you could feel identified if you said something, or battles usually with money management.
Here I leave an easy example and has helped me experience to have greater control over how to manage money for my business.
Suppose commercialized rubber duckies and have cash sales.
1. Know your income
1000 per month sell rubber duckies to $ 10. Then I receive income $ 10,000. Simple math.
You have the income you will meet up as time goes on it. Keep track of monthly income to see how much money your hotel from month to month so we can do a better cost control.
2. What are your sales costs
Buy my provider rubber duckies cost me $ 4 (Cost of Sales). Then the total costs per month were $ 4000. Where they left those $ 4ooo, multiplication of rubber duckies 1000 sold by the value of its cost. Until now most sencillo.En this point it is important to emphasize on how to run a business, because these $ 4000 represent money that have to reinvest again to buy 1000 ducklings.
Of all income to spend on other things, not buy back your inventory, it is one of the main reasons that fail to take time to re-sell inventory.
Cost is one ideal sales ranging between 40% -60% of revenues. The lower the cost of sales best for your business. Knowing the cost of sales also allow you to set a price and know which is your gross profit after a sale.
3. Control your fix costs
We continue to assume that I saved those $ 4000, then they left me $ 6000 of income because I subtracted the cost of the product. In addition, I have two employees who pay $ 500 a month each, I have to pay a rent of $ 2,000, I have to pay $ 500 for electricity, water, telephone and internet. My fixed costs are a total of $ 3,500 to pay for them have to use the income I had left. $ 6000 $ 3500 less I is $ 2500.
Income is one of the ills afflicting much to small businesses. While some say it is cheaper to rent than buy, long term always agree to have a separate room to eliminate this expense. If you have the opportunity to buy, buy! If not possible, income may represent from 10% to 50% of revenues. Search the place that is most suitable in terms of location, space and cost. Advertising is an expense that you can keep fixed to help your business reach more people, also takes advantage of the free advertising available on the Internet to lower costs. It also seeks to reduce other costs to make you stay a better net income.
4. Pay your own salary
Now I have the $ 2500 free for me! Another error. Believing that what remains after covering fixed costs and variable costs is all for you, also it falls into a bad practice. Business petty cash petty cash is not your pocket. Learn and discipline yourself to establish their own salary.
What normally advise other entrepreneurs, they are allocated to wages between 20% and 30% of revenue.
In this example it would be that if my employees represent $ 1000 a month to complete the remaining 20% would be another $ 1000 you might as well set it as your salary.
And if not enough for you to live with the percentage you assigned, then worry by generating more income for you to raise your salary.
5. Don’t Forget Taxes
I already paid my salary, then, what do I do with the remaining $ 1500? Remember that we all have a partner who wants a percentage of our cake, so, Hacienda. It depends on the type of record you have the percentage of taxes you ask. I’m no expert on the subject of taxes, but it is important to also keep the cash to pay.
6. Focus on growth
Well, the government already was a part, now what’s next? Reinvest, the most important of a business is to stay in constant innovation and growth. What if one day someone were to buy more than 1,000 rubber duckies and I have only a minor amount, I’ll be losing money! It is necessary to get to know the market and know which are high and low seasons. Also invest in equipment or improving your home can give added value to your customers face. To grow you must reinvest, and if you want your salary grow, you have to concentrate on that.
It is worth mentioning that if you have credit sales you need to have funds to invest and support the time refinance your customers, because when you sell on credit not recover immediately the cost of goods sold, so you will have to seek funding own or third party to help you to refill your inventory.
In short, how to manage a business and the money it generates must be carefully monitored. You have to set the budget that you have during the month to know how to use it.
How to manage a family business
Well I spoke a bit of finance, but businesses have something that is more complicated than the business itself, families.
Family businesses have a complexity that can facilitate or re-disaster work. If there is harmony within the family, the days can seem eternal and problems without any resolution. I believe that knowing how to manage a family business is for people with too much patience, strength and intelligence, since there is most difficult to handle than the same family. Strategic planning of the family business has many issues, here is some advice for this category.
Define roles and salaries
Having a child sitting and charging business does not contribute anything to the contrary, is a very expensive cost. It is important to define what activity will each family member and how much will be gained. This way everyone will know what to do and what is the objective that has to achieve.
Keep business and family matters separated
If being time within a business is tired, take it home would be even more exhausting. Family problems worse if you take the business. Of course it is difficult to keep these separate issues, but the ideal is to strive to maintain harmony and times are dedicated specifically for each subject.
It may sound like simple, but for those who are in family businesses usually is not. Sometimes you want to review the business is not possible because you do not have enough authority or because children may not put enough attention. Maintain active communication is vital to avoid problems that can affect relationships.
Create the family’s protocol
The family protocol is a process that ends with the drafting of a document agreements made between the family guidelines established to define them with the company. Since the company property, inheritance, and different interests that involve them.
A people that I always tell them that approach as complicated as managing a family business the hardest thing is not to grow the business, but maintain harmony within the family. Although they have grown within a single core, each head is a world and each member will have different ways of thinking.
Running a business is not an easy thing. It requires different abilities to withstand high and low as they arise. Remember that a leader and entrepreneur has to be constantly updated, upgrade to business issues that you improve every day personally, and that personal development and boost your business.