Six Steps to Small Business Success

BEFORE YOU READ THIS BOOK

We intentionally designed this book so that you can jump in and start with the chapter that fits where your business is today. What parts of this book will help you where you are now in the process? Whether you’re just developing a business idea or you’re looking to sell your ongoing enterprise, the sections of the book can be used as you see fit.
Of course, we think everyone can probably gain from reading the whole book, because there are lots of golden nuggets throughout. However, to get the most immediate impact, you might want to ask yourself the following questions to get a sense of where you may need the most help. In general, your answer to the questions will help you determine the step and chapters of the book that may be of most interest to you. For example, what consumes the most of your time in your current business? Is it managing employees, trying to grow sales, or putting out day-to-day fires? If you decide employees are your biggest problems, then skip to Step 3 on human resources to get some immediate relief. Then you can go back and pick up on other key areas. Now let’s look at the six key steps of the book and examples of day-to-day questions that the step will address.

Step 1: Pre-Business Planning
First, there is the excitement of all the planning that goes into starting your own business. A little planning on the front end goes a long way to ensuring the dream you pictured becomes a reality. Many businesses fail because the entrepreneur is a good technician at producing a particular business service or good but not necessarily a good businessperson. So if you are starting a new business, take a few minutes and learn from the experience of others who have succeeded there. Section 1 will help you answer these questions:

• Do you know what type of business or service best fits your dream?
• Have you selected the right business for you?
• Have you evaluated yourself for small-business success?
• Do you have the right form of doing business (corporation, sole proprietorship, etc.)?
• Do you have the right advisers supporting you?
• Should you look at a franchise, buy another business, or start from scratch?
• Do you have a business plan in place?
• Do you have a strategic marketing plan in place?
• Do you have the correct partnership agreements in place for multiple owners?
• Do you have the right tax structure for your business to minimize income taxes?
• How do you coordinate business and family life?

Step 2: Start-Up: Finances, Budgets, and Numbers
Once you start the business, there are certain key fundamentals and tracking mechanisms you must put in place to keep things on track and grow the business. Business success is a constantly moving target, so you have to take the time to learn what your tracking mechanisms and your customers are telling you. Section 2 will help you answer these questions:

• Do you have the right type of financing and business loans?
• Do you know how to read financial statements and understand what they can tell you about your business?
• Do you know what the key operating statistics are for your business?
• Do you know how you compare to industry standards?
• Do you know what your tax liability will be for the current year?
• Have you considered your options for commercial real estate?
• Do you have the right insurance coverage?

Step 3: Human Resources: The People Factor
Hiring, training, and firing employees are a necessary part of running a business. Section 3 will help you answer these questions:

• How do you go about hiring, interviewing, and screening employees?
• Are you paying a fair wage and competitive benefits?
• How are you training your new employees?
• Are you managing staff effectively?
• Do you know the right way to terminate an employee to protect yourself?

Step 4: Operations: Work Flow, Customers, and Sales
Daily operations involve numerous decisions about your product, service, and customers. Section 4 will help you answer these questions:

• Do you have systems in place so that your product or service is consistent?
• How do you manage your customers, grant credit, and respond to customer service issues?
• Do you have a sales and marketing plan in place, and do you adjust for market changes?
• Do you know when to expand your business?

Step 5: Building a Salable Business and the Sale
Once you have the business running smoothly, you need to plan for the eventual sale. Growing that saleable business takes some planning. Then once you decide to sell the business, there is a whole new set of issues: What is it worth? How do I transfer the customers to the buyer? What about the employees? How do I negotiate the terms of the sale? Section 5 will help you answer these questions:

• Does your business run smoothly without you?
• What is your business worth?
• Have you managed your debt so that you can afford to sell your business?
• How can you minimize the tax consequences of a sale?
• Who are the buyers for your business?
• What do you need to know to negotiate a sale contract, and who should be involved?
• How do you transition your customers to a new owner of your business?
• How do you transition your employees to a new owner of your business?
• What should you expect in the sale documents, and how will you structure the monetary transaction?

Step 6: Transitioning to Life After Business
Once you’ve made the decision to sell, how do you manage the transition for everyone involved? How will you adjust to your life after the business? Section 6 will help you answer these questions:

• What do you need to know about wealth management?
• How do you adjust to life after work?
• How do you pass on your values to your kids?
• How do you leave a legacy after you are gone?

Now pick the area that will have the most immediate impact for you, and start reading.
One last thought: Dream big, but always break it down into small steps, because small steps are easy to achieve and a lot of small steps equal one big step and a lot of big steps equal your dream.