Inc.com has provided readers with 10 great tips every entrepreneur should read. These tips range from the taking shortcuts to the bottom line.
1. Know your numbers:
Any good business owner will tell you that if you don’t know you numbers, you don’t know you business. If you don’t know how the flux in numbers affects your business and its needs– than quickly learn how. Numbers will tell you everything from market changes to HR issues to the bottom line.
2. Treat payment plans as loans:
If you offer a product to someone who will “eventually pay for it” you are in effect giving them a loan. Before hand, see if that customer is creditworthy and check your loan portfolio often to see what the average payment time is.
3. Easy formula to see if you are headed for bankruptcy:
12 months of current assets divided by 12 months of current debt. Your ratio should be 1.25 or higher; anything less than 1.0 is never good news.
4. Take the Long Route:
Shortcuts are great – when you’re driving in your car, not when you’re developing a business from the ground up. They almost always create more work in the long run and often keep you from creating the business you always wanted.
5. Friends and Business:
Generally, doing business with friends is never a good idea. Most of them time you end of doing a lot more work for very little money, and you might not be working to that friends advantage. Even if you promise to treat them as a normal client/vendor – they usually expect a lot more for a lot less. As history has shown, most friendships aren’t strong enough to withstand a business relationship.
Another important tip is to avoid becoming friends with employees. Favoritism is hard to avoid and that only creates animosity and jealousy in the work place.
6. Make the money before you spend it:
Not a novel idea, but you would be amazed at how many companies have a couple good months, and don’t think twice that things could go sour. They end up buying things they really don’t need just because they believed they could afford it. Rather than over spending on nonessentials, put the money away for a rainy day. It could be closer than you think!
Click here to read the entire article: Things That Every Entrepreneur Needs to Know
