Here are five quick small business tips that have helped me out over the past 5 years – let them soak in over the weekend and get going on them Monday.
Pay yourself as little as you can get by on
A lot of small business owners and freelancers pay themselves whatever is left in the account after all the bills are paid. I am here to tell you that this is a terrible idea. For the first year you need to be paying yourself the least amount of money that you can afford to live on. This comes in handy for those months that you have no work – as you can still pay yourself.
After a year you should have a pretty good idea of what you make and can afford to pay yourself. Don’t bother projecting out the year ahead – base your salary off of last years revenue and stock pile a couple months worth of your salary in the business account. This has saved my ass time and time again.
Indulge on things you use the most.
I see small business owners make a ton of stupid purchases – a 60″ LCD for the lobby – and really skimp where it counts. If you use something for more than a few hours a day, take the time and money to buy the best thing you can. For instance you should start with your desk chair. A good office chair should cost you between $700 and $1500 and you should be happy to pay that. It will last years and benefit you for the rest of your life (your back will thank you when you hit 60).
Lose the fear.
Want to know how to fail fast? Be afraid to do anything, see how at works out for you. Self-employment is risky, but it is even riskier to wait until you have other peoples salaries that you need to pay. If there is a risk you are debating – now is always better than later.
Be courteous always.
Business is built on relationships, and ‘throwing your weight around’ only makes you look like a dick. Instead just smile and be nice, it goes a long way and you wick be surprised what great service and relationships you can forge out of it.
Build up favors and don’t cash them in.
One of my favorite things is when someone owes me something because I did something helpful for them. I have a ton of favors built up, and I try ti never cash them in. The result is that when I truly do need a favor there are a lot of people there ready and willing to help. If you always cash in every favor people will be far less inclined to really want to help you.