More than a few
of our clients at Glassman
Wealth Services are small businessowners and entrepreneurs, so I’m often asked to
give advice on ways to improve their businesses or share ideas that will give
them a competitive edge.
As a small business owner myself, I know first-hand the challenges that
many of my fellow small business owners face. But
there are some smart things that small business owners should consider doing
now. Here’s my top 3 tips:
1. Access Capital Now
We’re five
years out from the Great Recession and the start of the financial crisis that
all but dried up access to capital especially for small businesses. That’s
changing now as banks have money to lend and more of an appetite to lend it.
The requirements are still the same like having good credit and a solid
business plan, and you may need to be prepared to personally guarantee the
loan. Most small business owners should consider accessing capital for three
reasons:
Expanding your
business by buying another company, launching new products or services or
hiring new employees
Refinancing any
old debt at today’s lower interest rates
Establishing a
line of credit (LOC) for a rainy day. You may need the liquidity a LOC provides
to occasionally meet day-to-day business obligations like payroll or temporary
cash crunch needs.
2.
Engage Rather Than Employ
Working in Washington, D.C., we’ve been known as the lawyer
capital, but today, this area is also known as being rich in consultants.
Fortunately great consultants exist in many parts of the U.S. So rather than
hiring for a position that may be just part-time, like a marketing strategist
or legal counsel, instead, consider retaining a consultant that is an expert in
their field.
Keep in mind
that many of these consultants left big companies to start businesses of their
own. We use consultants in our own business to fulfill many of our business
functions. In fact, we outsource most functions outside of our core business.
To learn more about outsourcing, read: Make Outsourcing a Competitive
Advantage.
The best
benefit to hiring a consultant is that they cross-pollinate. What I mean by
this is that they work with dozens, maybe hundreds of other businesses and
bring a perspective and advice formed by best practices from working with many
clients. This insider’s view can help you avoid costly mistakes and enhance any
number of areas of your business.
3.
Have a Lean Start-Up
I recently read
a fantastic book, The Lean Start-Up by
Eric Ries which is a must-read for all businesses regardless of size. The main
point of this book is that if you’re starting a business or launching a new
product, you don’t need to start with the grandiose office or spend years
developing a finalized product or service before you launch. Instead,
this book champions the idea of testing your vision by launching a more
rudimentary form of your concept to gain interest and feedback.
Companies like
Starbucks or Proctor and Gamble test new concepts on smaller markets before
launching their products worldwide. Small companies can learn from this
approach. Develop a prototype to get the product out, launch it in smaller
markets, test it, get feedback, pivot, and then refine it. By using this
cost-effective process, you’ll have a refined product or service designed to
the taste and needs of potential clients because they told you what they liked
and wanted along the way.
As the economy
continues to improve, small businesses will have more opportunities to expand
and grow. By taking advantage of opportunities that exist now, you’ll improve
your chances of success.
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