William Cox asked:
The one place where many entrepreneurs stumble and fall is in the basic management of their business. Being successful in any business venture requires at least a minimal amount of management skill.
The most important thing is to keep track of your money! Knowing where your money is being spent, and how effective those expenditures are in generating revenue will often mean the difference between success and failure. At the very least, keep track of your cash flow on a regular basis – cash in, and cash out. No business on the planet can survive without knowing what their financial status is at all times.
Keeping records is a big pain…but not keeping records is an even bigger pain. When tax time rolls around and you need to figure out what kind of profit your business has generated, you will understand this completely. There are software programs available that will assist in record keeping for your business, or you can use spreadsheets to do it manually.
Record every expenditure related to your business. Website subscriptions, hosting services, educational materials, stamps, envelopes, paper, printer cartridges, etc. Keep track of the miles you drive related to your business; it is a tax write-off. Running a legitimate home-based-business will entitle you to deduct a portion of your housing expenses, whether you’re an owner or still renting.
Revenue is NOT profit…I see so many ads on the internet and have heard so many sales pitches talking about the money these guys are raking in, complete with screenshots of their accounts to prove they are getting rich. What you don’t see in these ads is what it took to get that revenue in the door. For example, if I pay $5,000 for an ad campaign and invest 100 hours of my time, and my sales revenue from that campaign come to $5,100…I just spent 100 hours of my life working for a dollar an hour. You get the picture.
Speaking of profit, the government is going to want some of it. When you get past the break-even point and start generating profits, make sure you tuck a percentage of it away in an interest bearing account so you can pay your taxes when they come due. Too many small businesses have had to shut their doors because they end up scrambling to find the funds to pay their tax bill when the time comes.
Your business revolves around information. Your financial records, business contacts, websites you’ve bookmarked, etc. Protect it well! Store the information you receive and generate in relation to your business in more than one place. I recommend at the very least that you get an external hard drive and do a weekly backup of the data vital to the running of your business. There are also services available, some free, where you can store critical files. You can also burn the information to a CD and keep it at a friend or relative’s house.
Your most important physical asset is your computer. Safeguard against accidental or deliberate damage to that asset by investing in the proper protection. Buy a surge protector for your computer, preferably one with a battery backup built in that will allow you to shut down gracefully in the event of a power outage. One can be purchased for less than $100, and will potentially save you a lot of grief. And get a good anti-virus program! I personally recommend PCcillin by Trend Micro…I’ve used both of the other, more popular brands and have had my computer infected with viruses that I didn’t even know existed.
Manage your time effectively and you will experience much less frustration in the overall management of your business. Schedule a timeslot for every business related task and stick to it as closely as possible…including the administrative tasks discussed here. It may seem like it takes a lot of time away from doing the things that will generate revenue, but in the long run the time you invest now will more than pay for itself.