Proven Success Strategies
Written by Milla Liberson - President of OnPoint Business Solutions, Inc.
Starting a business is exciting! It’s a compilation of your dreams and a belief that your product or service will be well received by the public. Unfortunately, when the reality of entrepreneurship sets in, it reveals the hardships and risks of trying to make it as a business owner. As you may have heard, statistically the odds are against you. Approximately 80% of businesses fail within the first 18 months. Many startups are left with thousands in loans or tax liabilities, which frequently put the business and his / her family into a financial and emotional spin.
But this doesn’t have to be you! Although there is never a guarantee to your succeeding as an entrepreneur, I can speak from a track record of my own clients’ experiences, and in terms of what specifically enabled them to rise above the odds. Based on my experience helping develop small businesses, I have compiled a list of practical tips that will help you succeed in business.
1. When starting a business do so in an area or an industry where you have extensive practical experience and not in something that you happen to love or be passionate about. Those are not the qualities required for entrepreneurial success. Based on my work with over 3,000 clients I can confirm this to be the most important factor in whether your business/startup succeeds.
2. Be honest with yourself and admit if your product or service is not good. Self-awareness is key to your success because it can help preserve your sanity and finances.
3. Your product or service should satisfy people’s needs or desires, NOT yours. Confusing whose needs or desires you are after, will almost always get you lost in business.
4. Have funding before your first day in business. I know you may be thinking that you can survive on your great idea just long enough until the customers start beating down your door, but unfortunately, this is extremely rare. You must have at least an entire year of finances readily available to fund your first-year operations and marketing to hold you over until your product or service starts making an impression on the market.
5. Have you established an undeniable competitive advantage? Most startups fail on this point. When I ask “What is your competitive advantage” the answer is typically a pretty long pause followed by something like “Well….I really got to think about this some more”. This is bad. If you can’t readily tell me your competitive advantage, you’ve just confirmed why you aren’t ready to be in business.
6. You must regularly examine your expenses and review you’re the state of your profits. Checking the health of your business must be done by facts and not emotional insight. Without relying on real numbers, your financial decisions and assessment will be emotionally driven. It’s a recipe for failure!
7. Accept that in business you’re never totally knowledgeable and learning is always a necessity. No matter how smart, experienced or lucky you’ve been so far if you stop learning you will at some point trip up and make mistakes. Staying one step ahead in your business means you must always continue to learn and use this knowledge to experiment and create new ways to develop a better product or service. If you don’t, your competitors will!
8. Don’t skimp on a good attorney and an accountant. I’ve seen entrepreneurs try to navigate the legal and accounting areas themselves and I can tell you this is not smart. Find a professional who will give you one-on-one time, without rushing you out of his / her office. Use the time to learn and understand your legal and tax obligations because failing at these can entirely wipe out, even the most successful businesses.
Are you a small business owner paying too much in taxes or not making progress in your business? If you're like many entrepreneurs spinning their wheels working long hours and doing what it takes to succeed, then you should consider that many successful business owners don't work as hard as you do. In fact, they probably don't even spend half their time on job sites or the office but instead they spend their time strategizing and finding tax saving opportunities to keep more of they money they earn.
If you are ignoring simple business practices, you're probably throwing much of your profits out the window. Consider these tips:
1. Establish Your Financial Objectives - First create a mental picture of your desired success. Whether it's a specific annual sales number, profitability margin, your take-home-pay or any other ambition, write that goal and place it where you can see it as your daily reminder.
2. Have Face-to-Face Meeting With Your Accountant - Make sure you work with an accountant or adviser willing to give you face-to-face interaction on regular basis. Studies reveal that optimum financial results come from maintaining good relationships with people who care about your success. Avoid accountants who are only willing to "guide" you by email or phone calls. Always insist on face-to-face meetings during the year or when you have a pressing question or situation. We as accountants need to know your entire situation before we can offer solid guidance. Usually, that's not possible without meeting clients in-person. If your accountant isn't willing to extend his / her time for you, it's time to find a new one.
3. Monitor Your Progress - Research has shown that businesses who fail to monitor their progress with factual data, usually only last in business 3 years or less. Why is that? Because how you think you're doing is almost always a subjective analysis which usually doesn't match your company's true performance. To avoid the subjectivity trap, make sure you've got a functional accounting system that generates accurate financial reports you can rely on. Consider using off-the-shelf programs like QuickBooks, which are now also available on-the-cloud. My office has transitioned most of our Quickbooks desktop clients over to the cloud platform, with excellent results. Not only is it easier to use, but it's also more user-friendly, especially for those with zero accounting skills. If you can't dedicate enough time to maintain your accounting, consider delegating it to a bookkeeper or outsource the task to an accounting firm.
4. Pay Down Your Debt Before You Pay Yourself -You've heard the saying "Pay yourself first". Some people misunderstand the meaning of this advice, assuming they should have preference over outstanding bills. Not true. Instead, make sure you've covered your monthly obligations first, before you allocate a paycheck to yourself. Prioritize your outstanding bills to avoid unnecessary added costs of penalties, interest or discontinuation of services. Attempt to work out payment terms with your vendors, suppliers. If you've fallen behind on your tax payments, you can still work out a payment plan with the IRS and your state. In fact, this is something we commonly help clients who seek us out. Not only will this help normalize your cash flow, it will allow you breathing room to get back on track.
Need tax guidance for your business? Schedule your Free Consultation today or contact our office at 212-920-1184.
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