Entrepreneurship is a wonderful path to pursue. It’s a fantastic way to liberate yourself from the limitations and restrictions of the traditional career path. It can not only help you to transcend a career that was allowing your skills to go to waste, it can even inspire others to do the same and take a chance on themselves.
What’s more, small businesses are great for the economy. They pay their taxes proportionately unlike some of their corporate counterparts and they keep wealth in the local community where it belongs.
Yet, although running your own business is wonderful for many reasons, it doesn’t come with an instruction manual. There is no definitively correct way to run a business (if there were everyone would be doing it).
In lieu of an established game plan, entrepreneurs must navigate the perilous path of running a small business must get by on a combination of their own experience, advice of peers and mentors, gut instinct and “common sense”.
The latter can be extremely problematic. There are many “assumed truths” of business that nascent entrepreneurs accept as Holy writ that can actually do your enterprise way more harm than good. For example…
1. Overheads need to be cut down
Overhead costs need to be managed, there’s no question about it. It’s an important way of keeping a healthy cash flow and ensuring that you can keep your vendors and employees paid on time.
But that doesn’t mean that you should always be on the lookout to scythe down overhead costs across the board. Some overheads will represent a greater return on your investment than others.
While you should make efforts to ensure healthy cash flow, you should also keep a pot free to invest into your business. Invest in new equipment, new employees or new digital tools like ELMO Performance Management Software.
This will facilitate growth, boost productivity, enhance your workplace organization and ensure the long term health of your business.
2. It’s better to have casual employees
Speaking of overheads, a new employee represents a sizable investment on your part. You have to pay their wages, give them benefits and invest in their training. Depending on where you trade, you may also be legally obliged to provide them with a pension.
You may feel that it’s best to sidestep this and employ people on a more casual basis. However, this may not necessarily be the best option for your business. The more you invest in your employees, the more they will reward you with their loyalty and hard work.
Casual employees have high turnover rates which can result in expense and diminished productivity. Moreover, casual employees may be less ready to embody your brand in the same way as salaried employees.
3. You should always be on the lookout for new customers
This is a half truth. While you should absolutely keep an eye out for new customers, this should never be at the expense of retaining the customers you already rely on. These are the foundation upon which you will build your future growth.
It may be easier to balance the two by incentivizing your existing customers to introduce their friends, family and colleagues to your business with exclusive offers, promotions and giveaways for both parties.
By all means go with your gut, but think long and hard about basing your business plan on any assumed truths of business.