If all it took was an idea, everybody would be a business owner. Here are some tips on how to make a good idea a good source of revenue.
All business owners want to focus on what their business does. The successful ones find a way to also focus on how it works.
Entrepreneurs who have a clear focus on what the business sells and how it can make money doing it still must manage the money. For 104 years we’ve been close friends to business owners and their families. We have seen hundreds of businesses fail, in a good market, because the money management wasn’t up to par.
Starting your own business is hard, but it isn’t rocket science.
Many people started out with a good idea and a banker to help them figure out the financial side of business operations. The old-time bankers will tell you that the best part of banking was sitting across the kitchen table from an entrepreneur with a “heart for his work” who wanted to learn how to manage a balance sheet.
We’ve got some stories, but we’ll save that for another time.
The fundamentals of starting – and keeping – a business haven’t changed much since 1912 when we began bankrolling the State’s economy. A successful entrepreneur almost always:
- Prepares a good business plan and revisits it from time to time,
- Listens, absorbs and learns from smart people, and
- Keeps a wary eye out for scam artists.
Solid Business Plan or Bust
The best, easiest work follows the better preparation. This is particularly true for your new business. The better preparation for starting and maintaining a business is the business plan.
Loved by business professors and consultants but feared by worker-bee entrepreneurs, a business plan forces you to put down in writing the important stuff: what the business will do, how it will make money, what makes it different, why customers will want what you do, how much it will cost to operate, how much you want (and need) to make for it be worthwhile.
The forced discipline of completing a business plan has a number of benefits, not the least of which is a “sanity check” – is this really a good idea that can generate sufficient revenue? Even the US government can help would-be business owners to get started with a free tool to help you create a basic business plan.
A business plan won’t make your business succeed, but we can’t recall a firm that survived without one.
Learn to be Smart
The best entrepreneurs are information sponges and they seek sources for the best information. Good bankers are always a part of that group. Seek out a community banker at Peoples Bank who has the experience and training to help you with the fundamentals of financing and balance sheet management. Peoples Bank pays their bankers for just that kind of community economic development and, in fact, the bank enrolls many of them in a 4-year specialized course called the North Carolina School of Banking to learn, among many other things, extensive business accounting best-practice. Over the years this School has taught thousands of community bankers from all over the US how to offer sound business financial management advice to entrepreneurs. (The majority are from NC, which is a big reason why North Carolina has one of the country’s best-managed companies in the country.)
Your community banker(s) will help you understand how to put a good business plan together, why you need to keep your business account(s) separate from personal bank accounts, and what to know about lining up finance options. There are many different ways to finance business needs so you will need guidance for understanding which is the best option for your company.
In addition to your community banker, the Small Business Association has loads of local business operation resources, including links to organizations who can provide mentoring from experienced business owners and managers.
Don’t forget to pay taxes! We can’t tell you how many people start their business and do well – or rather think they are doing well – until they get a tax bill they can’t cover! A good accountant or tax planner is worth their weight in fees to avoid that complication.
Prepare for S-c-a-m Attacks
Your computer screen informs you it won’t work today unless you pay it to. Scam artists are causing just such a thing to happen in offices all over the globe using “ransomware”, malicious software unwittingly installed on computers. It used to be that business owners could rely heavily on their instinct to avoid scams and frauds. Those days are gone. Now threats can arrive unseen via an honest mistake in clicking a bad email link or visiting the wrong website.
To prepare against it, smart business operators are training themselves and employees to be smart about cybercrime methods and how to avoid them.
Nobody is immune to theft or fraud, and business owners must be wary of schemes or offers that appear “too good to be true” or that come buried in the millions of bytes delivered over the internet connection in the network closet.
Small Businesses Make It Great
The best part of any economy is the small business. The people who work there are some of the most creative, industrious and happy of any group. Their long-lived companies are living testimony to the validity of the fundamentals contained in this post. Successful business owners have a solid business plan, make a personal connection with a well-trained banker, know how to choose the best among their options for borrowing money, and are prepared to identify and survive threats.
Be assured of our best wishes for your company!
Links to resources referred to this post:
- Build Your Business Plan (SBA online tool): https://www.sba.gov/tools/business-plan/1
- Peoples Bank Commercial Loans (from Peoples Bank website): https://peoplesbanknc.com/commercial-loans
- Small Business Association Local Resources (SBA web site): https://www.sba.gov/tools/local-assistance
- Ransomware on the Rise (FBI post): https://www.fbi.gov/news/stories/2015/january/ransomware-on-the-rise/ransomware-on-the-rise