Has there ever been a time so challenging for small business owners? What we expected to be a short-term lockdown has turned into more than a year of financial struggle for the small business community. Even as the economy recovers, small business owners aren't out of the woods yet:
- Many small businesses haven’t returned to normal levels of operation.
- 45 percent think it will be more than six months before they're back to normal operations.
- Nearly two-thirds of small business owners say they'll need to make changes to weather the next six months.
- Meanwhile, more than half received no financial assistance in 2021, and one in 10 tapped personal finances for business expenses.
There's not much room for error under these circumstances. In order for small businesses to survive the next six months, they need to follow good practices that give their business the best shot at success. What does that look like? If you're looking to whip your small business into shape in 2021, Aston American University presents a guide on where to start.
Plan, plan, and plan some more
If there's one word to characterize the past year, it's “unprecedented.” So how can small business owners plan ahead while navigating uncharted territory? The truth is, planning doesn't set your business's future in stone. In fact, a good plan helps you stay agile. That’s because the business planning and budgeting process forces business owners to focus. When you understand your long- and short-term needs, industry trends, and potential setbacks, you have the information you need to stay agile and adaptable.
Your planning should also include how you intend to structure your business. For example, if you decide to start a company, you’ll need to know how to complete the process and file all the necessary documents. Fortunately, you can use a formation service such as ZenBusiness to help you start a corporation online and properly filed with the right state offices.
Keep an eye on your finances
The budget is at the heart of any small business's plan. Poor budgeting is also a leading reason businesses fail. Whether your business is thriving or barely scraping by, financial monitoring is the smartest thing you can do for its health.
That's a lot easier when business owners avoid mingling personal and business accounts. A dedicated small business bank account makes it easy to track your company's income and expenses. It also opens the possibility of integrating business bank accounts with accounting software for entry-free bookkeeping, online bill pay, and instant cash flow projections and insights.
Instant financial statements don't do much good if you don't know how to read them. Familiarize yourself with key financial statements and you’ll be able to assess your business’s health at a glance.
A key part of a business’s finances is paying your employees and managing payroll. If you’ve got a larger team, then purchasing payroll software may be your best option, but if you only have a few employees, you can use a payroll calendar template which will allow you to create a payroll process. Look for a template that allows you to update your employees’ information and easily track state and federal taxes.
Implement cybersecurity solutions
No matter the size of your business, you’re at risk of cyber attacks, including malware and ransomware. These attacks can cost your business thousands and are difficult to prevent without the help of professionals. Your best option is to work with a dependable and skilled team so you can concentrate on running your business while they handle security solutions.
Work smarter, not harder
Part of planning is identifying your most valuable customers and most profitable enterprises. Developing your most successful ventures and spending less time and money on those that don't pay optimizes your small business's capacity. If you haven't already, analyze your target audience and their shopping habits. Don't assume this is the same as pre-COVID. McKinsey & Company notes that the pandemic has profoundly altered consumer behavior and loyalty. Consumers are changing where they shop, what they buy, and their brand priorities in 2021.
This is also the time to invest in automation. As labor costs rise and margins shrink, it'll become more important than ever to streamline through automation. Automating labor-intensive processes isn't necessarily cost-prohibitive. Accounting, customer support, inventory management, and social media can easily be automated without significant investment or drop in quality.
Surround yourself with the right people
That’s not to say you should replace your entire staff with AI. Good employees are a business’s best asset, and they’re worth keeping. CIO.com explains that when businesses invest in employee retention in the form of competitive compensation and advancement opportunities, they’re rewarded with lower turnover, higher morale, and improved productivity.
A successful entrepreneur’s support system extends beyond their business’s four walls. When small business owners join the local chamber of commerce, they gain access to an expansive small business network along with counseling, business services, and help promoting their business. In a business environment where relationships are key, you don’t want to miss out on this catalyst for growth.
Small business ownership is rife with setbacks — some big, some small. It’s how you respond to those setbacks that defines your business’s future. When entrepreneurs stay agile, informed, and connected to local resources, they put their businesses on the path to lasting success.
Aston American University can help provide you with the education and skills you need to advance in your career. Get in touch with us today by using this contact form.
