I’ve yet to encounter a single business owner who’s reached some grand, stable plateau beyond failure, disappointment and doubt. We all experience it. Instead of discouragement, focus on becoming more resilient, on learning how to handle stress productively.
5. Watch your finances. When you are planning your startup budget, make sure that you have enough money to cover not only your startup expenses, but also operational expenses for a several months in case you do not make a profit right away. Keep some money on hand for emergencies and large orders as well.
Running a business should be creative, satisfying and enjoyable. It’s a chance to express yourself, meet interesting and creative people, potentially make a lot of money and create a whole new life for yourself.
That’s one reason Berkshire’s corporate headquarters still has only a handful of employees, with almost all the managing work left to its unit’s managers. “It is a real pleasure to work with managers who enjoy coming to work each morning and, once there, instinctively and unerringly think like owners.”
8. Keep it small. In 2006, Buffett wrote that he’s skeptical “about the ability of big entities of any type to function well.” In his opinion, “size seems to make many organizations slow-thinking, resistant to change and smug.” That’s one reason Berkshire’s corporate headquarters still has only a handful of employees, with almost all the managing work left to its unit’s managers. “It is a real pleasure to work with managers who enjoy coming to work each morning and, once there, instinctively and unerringly think like owners.”
All the way back in 1979, he wrote: “In large part, companies obtain the shareholder constituency that they seek and deserve. If they focus their thinking and communications on short-term results or short-term stock market consequences, they will, in large part, attract shareholders who focus on the same factors.”
Berkshire has never split its Class A shares. As a result, one share is prohibitively expensive for many retail investors. (Track the latest price here.) That discouraged people from rapidly moving into and out of the stock, and that’s exactly the way Buffett likes it. He wants shareholders who share his long-term view.
It can be easy to start a small business, as there are opportunities to fit almost every budget and skill. It is often harder, however, to run a small business successfully. Running a successful small business often starts with the planning stage when you are deciding what you will sell and where you will locate your company. It doesn’t stop there, however, as everything from your choice of employees to your accounting practices may influence your potential for success.
“Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.” As he put it in one of his most-often quoted sayings: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” This is an update of an article that was previously published.
7. Stay on top of your accounting and small business taxes. Small businesses often have to pay quarterly taxes and may be subject to tax requirements that individuals do not face. Keep records of all of your income and expenses, and file taxes according to the deadlines of your local, state and federal tax agencies.
From managing to marketing and everything in between, the world of small business can be both exciting and overwhelming. It’s a place where no two workdays are exactly the same and where unpredictable things happen. If you’re thinking about starting (or you already run and manage) your own business, check out the following list of tips to improve your chances of success.
So, resist the urge to cover all the ground alone. Saving financial resources is important, but don’t let your task list undermine your big goals.
3. Secure any business licenses and permits that are required in your jurisdiction. The licensing you will need may depend on the jurisdiction in which you will set up shop. In many jurisdictions, you will need a business license, even if you are running a business out of your own home.
Your strategy, your marketing plan, your target market — nothing is set in stone. The world is changing more and more rapidly each day. Your industry will likely experience a shift, whether slight or monumental, at some point. As a small business, you are at a disadvantage, because your resources are a lot more limited. But you have a priceless advantage in ability to change course and adapt far quicker than a larger organization.
In this area, Buffett argues that “inactivity strikes us as intelligent behavior.” In 1982, a year that saw a number of corporate deals, Buffett thought that in many of them, “managerial intellect wilted in competition with managerial adrenaline. The thrill of the chase blinded the pursuers to the consequences of the catch.”
Don’t shy away from the sales and marketing aspect of business. Learn how to do it. Study it and practice it. You will probably find it nerve wracking at first, but get through it! Question everything you do in the business, asking ‘how is this going to make money?’ If it won’t lead to profit ultimately then don’t waste your time doing it.
Pay attention to all small-business-related regulatory issues. Federal, state, and local government agencies require an array of licenses, registrations, and permits. Obey them or face stiff penalties, including possible closure of your business.
You can claim a proportion of the cost of things like council tax, heating, lighting, phone calls and broadband. You can use a flat rate to calculate your simplified allowable expenses starting from the 2013 to 2014 tax year.
Many homeowners choose to convert an existing room, such as a box room, loft room or garage into a habitable space. If your plans are for altering an existing space in your home, consider if there’s enough natural light, space for a desk, chair and other office furniture as well as internet access and a telephone line.