There is a fundamental truth about construction. Any building that is constructed has a better chance at lasting on bedrock than on sand. That is a guarantee!
This is why it is so important that your business has a solid foundation. How can you make sure that this is the case with your business?
By honestly taking stock of how you have structured your company and making the necessary upgrades and adjustments so that you are operating like a well-oiled machine. Many times service professionals setup their business “flying by the seat of their pants” and figuring things out as they go along. The problem with this, just like with any constructed building, is that after a while, the cracks are going to show up. They’ll start out small and then gradually expand to large, messy and very expensive issues that can no longer be ignored. When this happens, it can affect one’s reputation, cash flow, marketing efforts and most certainly your mindset and the level of stress you deal with as an entrepreneur.
Whether you are a business newbie or an established entrepreneur, NOW is a great time to analyze your infrastructure to ensure that it is setup to support your long-term growth and success. Following are a few key areas to consider:
- Incorporation: Creating a corporation for your business will safeguard your personal assets in the event that you have a professional dispute with a client or vendor. While I am not at all predicting this be the case in your business, it’s a smart business decision to protective measures for your interests. After all, you’re putting a lot of time, energy and effort into growing your company! Why would you not take steps to protect your investment? Your business entity should be completely separate from your personal affairs. It is a protection for you, your company and your clients. By reviewing your options and setting things up properly, you will have a bedrock foundation because you have legitimized your company.
- Insurance: It will take diligent effort to find the right insurance for you and your household. Seek out insurance agents from people that you already know and trust. There are many insurance resources for entrepreneurs. It is important that you apply and qualify for and enroll in the insurance plans that are necessary for your family and your business to ensure that you personal and professional needs are cared for over the long-term.
- Operations: Systems are critical to the successful business. What processes will you have in place for enrolling new clients into your practice? How will they pay you? How do you delegate tasks? Handle your financial affairs? Having documented systems will save you time, money and energy (because you won’t find yourself re-inventing the wheel every time you sit down to deal with a task) and will allow you to consistently provide high quality service to your clients.
- Technology: No matter what type of service business you are starting, technology will likely play a large role. You must have reliable hardware and software. Trust me, you do not want to run a business using your neighbor’s WiFi! Some free services and tools may be handy. But when it comes to the day to day functioning of your business, you want the most reliable technology available and will need to know how to use it to best serve your clients.
- Financing: I am often asked, “Can I start a small business with no money?” My answer is, “Absolutely NOT.” The truth is that it takes money in order to make money. At a bare minimum, you need office supplies, software, hardware and savings for back up. I would never encourage an individual to start any sort of business with no mo.ney because I personally have no experience in that area. Even with a limited budget there are numerous ways to obtain the resources you need to grow. So instead of focusing on how little you may have, focus on making good use of it and HOW you can create or access the financial resources you need. Look for the opportunities and get creative! There is always a way to get what you need.
These are a few of the important aspects of setting up your business that will allow you to have a bedrock-like foundation. If you have already started your business, you can still implement these components to strengthen your business. Do not to become overwhelmed by the list above. No business is “perfect” and every entrepreneur needs these basic elements in place in order to grow and succeed. You may find that some aspects of your business foundation work very well while others need some attention. This is perfectly okay! This is part of the process of creating a successful, thriving company.
One thing is for sure, you do not want to construct a business on a sandy foundation. If you do, you will find that the tides of change and trouble will wash your business out to sea. Just like footsteps on a sandy shore are soon to disappear, without a bedrock foundation, your business will quickly fade. By implementing the points above, you will be sure to have a foundation that is built to last and on which you can build a successful, sustainable business.
If you’d like to learn my PROVEN 5-pillar system for building a successful professional services company, I invite you to join me for a free traning webinar on “How to Structure Your Business for Maximum Profits and Productivity” Get all the details at http://smartsimplemarketing.
YOUR TAKE ACTION PLAN FOR THIS WEEK:
- Review your business entity. If you’ve been running as a sole proprietor, look into incorporation and see if it’s the right fit for you. Doing so could likely be a protection for your personal assets, but may also save you money come tax time.
- Get quotes for insurance that will provide you with coverage similar to what you experienced as an employee. If you don’t know an insurance agent, ask friends and family members for recommendations.
- Review all of your systems. Take an afternoon to take stock of the various recurring tasks in your business. Start setting aside time each way to document your processes and procedures so that your business begins to run smoothly.
- Invest in technology that you need to run your business. Look for any areas where you’re lacking in technology and make purchases to support your business – or make plans to soon.
- If you need capital for systems, technology or creating a business entity, start looking into your financing options. There are many resources available to entrepreneurs.
Brenda Stanton says
Great advice as always Syndi! Love how you marry the practical into the strategic – you need both to have a balanced business! Thanks for sharing your wisdom…
Andrea Costantine says
Oh the foundational pieces… yes, this definitely isn’t the fun part of having a business. I’m currently listening to the E-Myth and what a great reminder it is that we all need to look and treat our business like a real business, not a glorified hobby. Ensuring these components are in place will set the stage for success!
Sydni Craig-Hart says
Well said Andrea! No one who is successful in business has created those results without paying attention to these details. Thanks for sharing your thoughts. 🙂
Amy Kinnaird says
Always great reminders. I work with a lot of clients each month and most do not have any systems in place for anything. They don’t understand the value of investing in themselves and their businesses. Now, I have to admit that I often over think some of those decisions, too. I finally put in a budget for new technology each year, and for training and education, and for business travel.
Our SBDC in Louisiana have a program for business owners where they can apply for $$$ to fund larger items like a website, logo design, purchasing and setting up QuickBooks, etc. This is a great resource to check out and see what funding you are available for. Also, money for minority and women owned businesses.
Sydni Craig-Hart says
You’re quite welcome Amy! Any time I have a conversation with a client who is balking about an investment I need to make, I remind them…
“If you want/expect people to invest in you, you have to be willing to invest in yourself first. If you won’t, why the heck should they?”
That usually brings them back to their senses. If an entrepreneur is not investing in technology and ongoing training, they are dabbling in a hobby, not running a business. It’s that simple. That said, no entrepreneur has an endless reserve of money to spend in growing their business. So tapping into to resources such as the SBDC is a great way to gain access to the capital you need.
Jennifer Bourn says
Sydni – this idea of laying a foundation for your business success is so important – and all of these items are things skipped over time and time again because they aren’t sexy and fun.
These behind-the-scenes actions will safeguard you and your business and protect you from potential disaster. Thanks for calling our attention back to such an important step in starting and growing a business.
Bourn Creative Branding and WordPress Web Design
Sydni Craig-Hart says
Thanks for the note Jenn! You’re so right, this is definitely NOT the fun part. But if we ignore creating (and maintaining) a strong foundation, the results are not only NOT fun, they WILL be downright stressful, frustration and quite costly. Thanks for taking the time to share your thoughts! 🙂
Kristi LeGue says
Sydni, these are great tips. As a CPA I have to say, incorporating is definitely not for everyone. However, I always suggest that every single person in business find themselves a good tax preparer. Asking about whether incorporating is for them should be one of the first questions to them. However, the entrepreneur has to remember, there are very strict rules and guidelines you must follow as a corporation, or all is basically null and void. Very important to have a good tax preparer on your side. I recommend asking other entrepreneurs who they use and interviewing at least three to make sure you get the right fit for you.
Sydni Craig-Hart says
Thanks so much for your insight Kristi! As I mentioned, whether or not to incorporate is a key consideration. You’re absolutely right. It may not be for everyone. But every business owner needs to consider the options available and make a decision about what is the best structure for their company, both from a legal and a financial perspective. What one shouldn’t do is “fall into” a certain structure by default, because they haven’t made a decision about it, or do what “everyone else” is doing. I’m so glad you took the time to share your thoughts from the perspective of a CPA. Thanks for that! 🙂