As a new business owner, you’re probably spending most, if not all, of your time and energy on selling products or servicing clients. But if you want to set the business up for long-term success, you must have the right systems and processes in place to manage the company effectively.
Here are 8 essential management tips that new business owners can’t afford to ignore.
1. Set Up an Official Business Entity
No matter what products or services you sell, whether you have employees, or how you get funding, your business should be a separate taxable entity (e.g., an LLC.) This will prevent business financial issues from affecting your personal finances and protect you from getting sued for your personal possession.
Additionally, separate your personal finances from business finances. Open a business bank account and use a business credit card for all company-related expenses. This helps keep your books clean and avoid getting into trouble with the IRS if your company gets audited.
2. Purchase the Right Insurance Coverages
Depending on the nature of your business, you’ll need to purchase different types of insurance. The most common ones include general liability insurance, commercial property insurance, business income insurance, professional liability insurance, workers’ compensation insurance, data breach insurance, commerce umbrella insurance, and commercial auto insurance.
At a very minimum, start with general liability insurance. It will protect your business from claims if it causes bodily injuries to a third party, damages to someone else’s properties, or personal and advertising injuries (e.g., libel, slander.) Make sure to purchase your insurance policy from a reputable carrier that’s financially sound and offers comprehensive coverage.
3. Get Your Accounting and Tax Payments in Order
Accounting and bookkeeping help you keep track of money going in and out of your business. When you log all the income and expenses as they occur, you’ll have a much easier time when tax season comes. Not to mention, it helps ensure that you’re paying the correct amount of quarterly taxes so you can avoid unnecessary fees and fines.
If your company doesn’t have a complicated business structure, you may not need to hire an accountant or bookkeeper. Many new business owners find that accounting and invoicing software can meet most of their needs for as low as $10 to $20 a month.
4. Create a Business Plan
A current business plan helps you keep your eyes on the prize, so you can implement the right strategies to achieve your vision and business objectives. A well-written business plan is also the key to getting funding for your business.
The plan should include your business goals and objectives, as well as the details about your market. It should outline your marketing plan and financial projections. Creating a business plan isn’t a one-and-done exercise. Evaluate it regularly to see what has changed and how you can make adjustments based on the latest developments in your business.
5. Automate Your Sales and Marketing
If you just hang up your shingle and cross your fingers, your business won’t grow on its own. Sales and marketing are key to getting in front of the right people who need your products or services and are willing to pay for them.
However, you don’t have all day to manually track your leads and follow up with contacts. A sales and marketing automation tool can help you capture and convert leads more cost-effectively, so you can spend more time and energy on doing what you do best — whether it’s developing new products or delivering professional services.
6. Establish an Employee Onboarding Process
It’s tempting to just hire someone, throw them in at the deep end, and hope that they’ll put out all the fires. But this can lead to a lot of inefficiencies and even costly mistakes. Not to mention, frustrated employees are more likely to quit, and you’d end up spending more time on hiring and other HR tasks.
Before you start hiring employees, document your internal processes and how you want things done in the company. Train new hires well, so they know how to do their jobs and meet your expectations. Also, share your vision and core values to empower them to make the right decisions that align with your overall business objectives.
7. Set Up Effective Communication Plans
Whether it’s internal communication among team members or external communication with customers, vendors, or partners, a clear communication plan can help ensure that employees are rowing in the same direction and clients feel that they’re taken care of. Not to mention, you can be sure that no critical tasks have fallen through the cracks.
Define which platform to use for what purpose (e.g., Slack for general team communication, Basecamp for sharing project-specific comments or documentation) and the expected response time for each channel (e.g., 24-hour for email, same-day response for voice mail.)
8. Stay Current With Market Trends and Industry News
While it’s important to keep your head down and get things done, don’t forget to look up once in a while. Keep current on what’s happening in the big scheme of things so you can position the business to meet changing market demands and customer expectations.
Schedule time to catch up with industry news and join professional associations to stay connected with the latest trends. Invest in training and education to shorten the learning curve so you don’t waste time and money trying to figure things out on your own while leaving opportunities (and money) on the table.
You have to manage many moving parts when you start a new company. From setting up a business entity and choosing the right insurance coverage to investing in marketing and ensuring effective communications — nothing can be left to chance.
By following these business management tips, you can build a solid foundation to set your company up for long-term success.