Top 10 tips for SMEs
We were recently asked our opinion on the top 10 tips for new, and small established businesses.
The following list published in the Yorkshire Post Business section on 19 July 2012.
1.Manage your cash. There’s a lot of truth in the saying “turnover is vanity, profit is sanity, but cash is king”. Without cash your business will fail.
2.Understand your gross profit – the profit you make from selling your products. It’s not uncommon for businesses to sell products for less than they cost to produce because they don’t know their true cost.
3.Spend as little money as possible, especially in the early days. For example, if you can, work from a room in your home rather than rent an office.
4.Keep up to date, and neat, accounting records. Use accounting software. Software will help you prepare management information, vital in helping you manage your business more effectively. Tidy records will keep your accountant happy!
5.Set a budget. It doesn’t have to be “war and peace”, but spend a few hours writing down your forecast for the next twelve months. Every three to six months take time to review the forecast. Amend it where necessary.
6.Always file your tax returns on time, and pay your tax bill by the due date. If you’re having difficulty paying, speak to HM Revenue & Customs and explain why. Never ignore them, and never expect them to forget about you.
7.Nothing gives a stronger negative impression than not having an office number, especially if you’re providing professional services, so don’t just have a mobile phone as your only contact number. There are plenty of low cost solutions available without having to pay for a fixed line.
8.Outsource the tasks that either take up your time, or you don’t enjoy. It’s a false economy to thinks it’s cheaper for you to do them yourself.
9.Employing someone new is more expensive than keeping hold of a current employee. It’s in your interest to recruit, and then retain the best people. Happy employees mean happy customers.
10.You may be a small start up, but act like a large successful business. Apple didn’t become successful by failing to manage cash, failing to plan, failing to produce regular management information or failing to deliver the service their customers want.
The hardest part of the exercise was to decide which 5 or 6 tips didn’t make it into the top ten!
So, what would you add to the list?