I have owned a small business for about six years, and have also worked freelance for the past six years. While both sides have their pros and cons, operating a small business was by far the hardest. When working freelance, you just need to bill your customer, report said revenue to HMRC, minus a few business expenses that you can deduce, and pay taxes. With a small business, you need to pencil several dates in your calendar to make sure you do not miss reporting deadlines to declare VAT, salaries, and all your operating costs and revenue.
To make sure you spend most of your time doing what you are good at, i.e. creating your product or billing your time at a high price to paying customers, I would suggest you hire out most of the staff to help run your business. Unless you run a chartered accountant office, chances are you will bring more money doing what you are best at than digging through your receipts and accounts. At the moment, for our small business, we pay a flat fee to an accountant that reports all our activity, pays our taxes, and manages any tax matter. He even pays property taxes on the land we do business on, that we own. We do not have to think about anything.
Even better, they still have a flat fee, albeit a bit higher, if you have a high activity, say a bakery. For every piece of bread you sell, there will be a very small invoice to reconcile. Is that worth your time? Probably not. Find someone with a flat fee and let them take care of it for you.
Same thing for your IT management, your lawn mowing, office cleaning… For some tasks, you will realize it is cheaper to higher a person when you need them, or pay a small flat fee, than to have a staff full time, while for others, it pays to have a permanent employee.
Keep your costs low
It takes money to make money, as the saying goes. But you want to find that fine balance between spending too little for your customers to take you seriously, and too much, that may compromise the health of your business.
You can look into leasing your company cars instead of buying them, about renting some meeting room to get together with your customers instead of a big office on a permanent basis, and so on.
One thing I would recommend you do not skimp on is your mobile phone and data plan. You want people to be able to reach you at any time, and you need to have the means to call them back as soon as possible. While basic phone and data plans are really affordable, if you go over your quota of minutes or data, it can end up being really expensive. So choose carefully, it is better to get an unlimited plan at the beginning, see what you are really using on average over 3-6 months and then go for a plan that best fits your needs.
The same goes for online business banking. There are many offers out there, make sure you get what you need, as it is likely that during the first few months you will have a few glitches, your account may get overdrawn while you adjust your cash flow, checks may bounce… One would hope not but is can happen. Discuss ahead with your banker in order to avoid bad surprises. Then after a few months, visit your bank again, and adjust your deal to get the best offer for your needs.
Get out there
The biggest thing for small businesses is to get known. So take all the time you just saved hiring out people and go promote your business. You can find freelancers online that will do a great job promoting you on social media, however, you are the best person to promote your business locally.
Attend business owners’ meetings, your business school association’s events, any local event where you can meet your target customers.
Be ready, with business cards, stickers or goodies, and your best smile!