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6 Tips When Starting a Small Business

By Bidvest Bank
Starting your own business? Congratulations! It takes a lot of courage to believe in yourself and your idea. Once you’ve taken the leap, there are so many advantages to owning your own business, such as flexible working hours, being your own boss and the satisfaction of building something from the ground up. But there are also risks involved in leaving a permanent job and entering the less stable world of self-employment. To help you manage these risks and kickstart your small business in the best possible way, here are some tips to get you started:

1. Cash flow

Your business may be making a profit on paper, but if you don’t have that cash in the bank, you’ll struggle to pay rent, bills and even your own salary. It’s no wonder then that cash flow problems are one of the biggest reasons that small businesses fail. 

To avoid becoming another statistic, have strict payment terms in place. Invoice clients upfront (or charge a deposit) and chase customers up regularly if they are late to pay. You could also ask the bank for an overdraft, as long as you manage this correctly and only use it when absolutely necessary. Also work on keeping your expenses to a minimum when you first start out. Work from home instead of renting an office, employ people on a temporary basic and don’t splash out on fancy equipment or office supplies.

2. Get an accountant

Unless you really know what you’re doing when it comes to all things accounting related, you need to outsource this to an expert. It may cost extra money but it could also save you money in the long run, because accountants know the best way to manage the flow of money through your business. 

3. Use an invoicing system

Using an automated invoicing system looks more professional to your clients, and it helps you keep track of who owes you what, who you still need to invoice, and how much you’re bringing in monthly. Many of these systems operate online rather than on a desktop, so you can log in from anywhere at any time. Most basic invoicing products are also very inexpensive, so they’re definitely worth looking into.

4. Keep regular hours

Now that you’re the boss, you can manage your business from the comfort of your own bed, right? Not so fast – this can make you unproductive and inefficient. As you would at a “normal job”, set aside specific hours of the day to work and try and stick to them. At the end of the day, “switch off” and avoid answering emails or calls late at night (unless they’re really urgent of course). Being disciplined in this way will also help prevent burnout, and ensure that you keep a healthy work/life balance as your small business grows.

5. Don’t discount, add value instead

Because you’re starting out, you may be tempted to give discounts to clients in order to stimulate business. While it’s easy to fall into this trap, this is the quickest route to not making fair money for the work you do. Rather than giving discounts, try to add value to your customers. So, instead of, say, offering your clients 30% off your normal price, say that you’ll add 30% more value (such as by working 30% longer on a specific job).

6. Get a mentor

Find someone in your life that you would like to emulate or who you admire and seek out advice from them. They don’t even need to be in the same industry as you – they could just be experienced in a particular skill set. They may have ideas that could springboard your business plan or introduce you to invaluable contacts you could team up with. 

Starting a small business can be made that much easier with a Business Bank Account from Bidvest Bank. This transactional bank account is perfect for small to medium sized businesses as it also provides you with a gold Visa debit card that offers a range of services, banking tools and added benefits. Find out more.