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Small business administration

Guest post by: Russell Bowyer

Article Overview: Small business administration is top of the list of important considerations for success in business. All businesses have a life cycle and depending on where you are in this cycle will depend on your focus at that time. The business cycle in this context is not the economic business cycle, but instead refers to the various stages a business goes through from "Start-up" and all the way through to "Selling-up" and getting out of your business. The stages in a business cycle Start-up stage of a business - at this stage in the life cycle of a business the considerations and planning needed fall into how to start a small business. A well prepared business plan will see your business get off to a great start and set it off in the right direction.

Small business administration

Small business administration is top of the list of important considerations for success in business. All businesses have a life cycle and depending on where you are in this cycle will depend on your focus at that time. The business cycle in this context is not the economic business cycle, but instead refers to the various stages a business goes through from "Start-up" and all the way through to "Selling-up" and getting out of your business.

The stages in a business cycle

Start-up stage of a business - at this stage in the life cycle of a business the considerations and planning needed fall into how to start a small business. A well prepared business plan will see your business get off to a great start and set it off in the right direction. All too many businesses do not have a plan and find that the business flounders around without direction!

In the early stages of a business one key factor that is top of the list is managing your financial growth - there are many new businesses that end up over-trading and simply run out of cash even though they are profitable! Preparing a good cash flow forecast before you begin is crucial so that you obtain the necessary funding you need to take the business forward.

Make sure you have good debt collections so that your customers pay-up on time and in full - a profitable company with no cash-flow is a business on route to failure. Consider very carefully your payment-terms for your customers; the obvious best payment option would be cash up front or for your customers to pay by direct debit or standing order. However, this is not always possible, so you may have to give credit to your customers.

Be careful though and do not give too much on this and ideally no more than 30-days. If you are on a "Cash on Delivery" payment basis with your suppliers and you give say 60-days to your customers, it will not be too long before you run out of cash as your business expands, even where you are making a profit.

Other aspects of your business to get right from the out-set are as follows:

- Paying your taxes on time, whether this be the employment taxes deducted from your employees or if you are VAT registered or in the USA sales tax payments. Also, your Corporate tax on profits needs to be set aside and budgeted for and then paid on time.

- Insuring your business - Make sure you take out the right insurances and I recommend you register with a good insurance broker. Business interruption insurance, professional indemnity, public and employers liability insurance and contents insurance are to name a few important policies to take out and maintain. Always make sure you are up-front when completing the forms so that you never have a problem should you need to make a claim.

- Use up-to-date technology - subject to finances you should try to use the latest in technology for your industry, which will make sure your business is run efficiently.

- Registering with relevant organisations - your business sector may be governed by certain government organisations or it might be that there are some well known organisations that it would help for you to be registered with. Make sure you know who you must be registered with and who it would be helpful to be connected to create the right impression with your customers.

Managing your business on an on-going basis - As your business becomes established you will find that there are many things you will need to get to grips with. You will find in the early stages a steep learning curve is what is faced by most new business owners. So long as you get to the top of this curve and survive the first 2-5 years you should continue into the future. The stages you will go through include employing other people to do the work and getting to grips with delegation.

The problem faced by most business owners is the worry that your employees will not do the job as well as you! However, so long as they are at least 80% as good then things will be fine. If you are faced with this dilemma of the fear of employing someone to take your place in the business, then take time to look around - there are thousands of businesses that are totally employment run whereby the owners can take a back-seat. It does work and it will make your business more valuable to potential buyers when you get to the final closing stages of your business.

By having a managed-run business you open the market up to a whole set of other potential buyers - investors that want to buy a business, but not to get their hands dirty as it were.

Expanding and growing your business - Assuming that you have the management of your business sorted out and you have begun to delegate work to employees then you can concentrate more of your resources on expanding the business. Focus on your existing customers so that you can get a reputation for great customer service and ensure that your customer spend is high and they return to you and not to your competition!

Spend time on looking at ways to get your existing customers to keep buying and ways to grow your business and increase profit! You should also develop key performance indicators for your business which are those indicators that show how your business is performing and allow you to monitor those indicators that make a difference.

Selling your business - the final stage in any business is when you decide to sell up and move on. In all the stages leading up to this final stage will make a difference to how easy it is to sell your business. A well run, profitable, employee managed business will attract a higher profit-multiple for your business when you sell it - a business that has its finger on the pulse as it were will be much more attractive to buyers than one where the information is difficult to extract.

So if you have this final stage in your sights as part of your business plan out the out-set then you will make sure of a quick and easy sale whereby you get much more money for your business than you would ordinarily have.

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Article Tags: business cycle, business plan, economic business, how to start a small business, life cycle, right direction, small business administration



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Ideas for developing my business - I'm a 19 years old guy from the Dominican Republic that is studying business administration in college and I want to start a magazine with college’s students as the target. I want some ideas for developing my business.
Ideas for developing my business - I'm a 19 years old guy from the Dominican Republic that is studying business administration in college and I want to start a magazine with college’s students as the target. I want some ideas for developing my business.
Re: Ideas for developing my business - [quote="kristopher":1fh9468j]I'm a 19 years old guy from the Dominican Republic that is studying business administration in college and I want to start a magazine with college’s students as the target. I want some ideas for developing my business.[/quote:1fh9468j] My first suggestion is research your competition, see who's out there and what are they doing? When I was in University there were a lot of students trying to launch magazines without much success. Once you know what your competition is doing you can figure out how to position yourself to stand out of the crowd.
Re: Budgeting Approach - Budgeting plays a vital role in any business. I totally agree with Ringo what he said and how they had planned to invest and continue with their business. The information you share over here is nice peter. Small entrepreneur will get a great help from your provided information.
Look For Investors - I would certainly look for loan and investor possibilities before bringing on a partner -- unless a partner brings something in addition to money to the business. There have been numerous posts on the board about a wide variety of financial options. There are bank loans, equity loans, small business loans, small business administration, angel investors and many other options. It is also key to have a qualified person draw up a contract for any agreement. If another person has the contract drawn up, make sure that you have a qualified person review it to look out for your interest. This is important whether you are dealing with friends, family or strangers and it will protect each person involved in the agreement. Chris


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