Starting or growing a small business is an exciting endeavor, but it can also be a challenging one. To set yourself up for success and avoid common pitfalls, it is crucial to have a solid understanding of key aspects of business management. This blog will explore ten essential topics that every small business owner, entrepreneur, and professional changing careers should know to thrive in today's competitive landscape.
1) Incorporating your business
Incorporating your business provides legal protection and separates personal and business liabilities. According to Wolters Kluwer, some of the benefits of incorporating may include; securing your assets, gaining tax breaks, bolstering credibility, and gaining anonymity, among others.
2) Creating a solid business plan
A business plan acts as a roadmap, outlining your goals, strategies, and financial projections. It helps secure funding, attract investors, and make informed decisions. According to a study by the Harvard Business Review, entrepreneurs who create formal business plans are 16% more likely to achieve viability than those who don't.
3) Safeguarding your business
An insurance policy protects your business from unforeseen risks like property damage, liability claims, or cyberattacks. In fact, according to a report from the Federal Emergency Management Agency (FEMA), 40% of businesses do not reopen following a disaster. On top of that, another 25% fail within one year due to inadequate insurance coverage. The United States Small Business Administration found that over 90% of companies fail within two years of being struck by a disaster.
4) Navigating business taxes and fees
Understanding your industry's tax obligations and regulatory requirements is essential to avoid penalties and maintain compliance. The average small-business owner spends at least $12,000 every year dealing with regulations, and nearly one-in-three spends more than 80 hours each year dealing with federal regulation, according to NSBA data.
5) Building a winning team
A talented and cohesive team can propel your business to new heights. Invest time in recruiting, onboarding, and developing employees. According to a McKinsey study, companies who invested in developing their team saw a 28% return on their capital investment.
6) Budgeting to make smart business decisions
A well-planned budget enables you to allocate resources effectively, track expenses, and make data-driven decisions. According to a survey by Clutch, 50% of small businesses with a budget stuck to their Q1 and Q2 targets. 54% of small businesses see value in maintaining a budget.
7) Creating impactful compensation packages
Competitive compensation packages attract and retain top talent. Consider offering a mix of salary, benefits, incentives, and professional development opportunities. According to a Glassdoor survey, around 60% of respondents strongly consider the perks and benefits before accepting a job offer. In addition, 80% of employees prefer additional benefits over a pay increase. Studies show that a competitive benefits package can significantly help employee acquisition and retention.
8) Creating a winning marketing strategy
An effective marketing strategy helps you reach and engage your target audience, build brand awareness, and drive sales. Leverage digital marketing channels and utilize customer data to personalize campaigns. Research by McKinsey shows companies that grow faster drive 40 percent more of their revenue from personalization than their slower-growing counterparts.
9) Selling like a professional
Mastering the art of selling is crucial for business growth. Understand your customers' needs, communicate value effectively, and build long-term relationships. 80% of high-performing sales teams rate their sales training process as outstanding or very good. It's estimated that U.S. companies spend more than $70 billion annually on sales training. Top teams understand that training is vital to empower sales reps with productivity-enhancing technologies and ultimately better engage with customers.
10) Business financing
Access to adequate financing is vital for expansion, equipment purchases, or operational needs. Explore various funding options such as loans, grants, or venture capital. The typical funding options for small businesses include; Self-funding, Investors, Crowdfunding, and loans. According to Forbes Advisor, the Federal Reserve Banks, and the 2021 Small Business Credit Survey reported that 43% of small businesses chose to apply for loans with large banks.
By prioritizing these ten topics, small business owners and entrepreneurs can overcome challenges and maximize their chances of success. A well-rounded understanding of these areas is crucial, whether it's ensuring legal compliance, attracting customers, or managing finances. Implementing these techniques benefits the workplace and provides valuable skills for personal life, such as budgeting, effective communication, and strategic planning.
Remember, knowledge is power. Equip yourself with the necessary tools, adapt to changing market trends, and continuously learn to thrive in the dynamic world of entrepreneurship.
In our next series of blogs, we will cover each of these steps in detail. Stay tuned! Subscribe to our newsletter.
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Sources:
1. Source: Wolters Kluwer
3. Source: FEMA & SBA and CNBS
6. Source: Clutch How Small Businesses Budget