Step Five: Insure Success
PAGE 2
Pay yourself something.
From an owner's compensation perspective, they tend to take too little, too long or too much too soon. They either sacrifice themselves in hopes of some pot at the end of rainbow (and work around the clock for little or nothing and burn out), or they drain the business of cash. For example, a corporate executive who's used to earning $100,000 year will start a business and want to replace that income. She'll start sucking money out of the business prematurely and never have enough to reinvest back in during the early stages. The key is finding the right target point of compensation, find a blend between not killing yourself and not overpaying yourself either. Reach out to a small business adviser to get an idea of what your salary should be.
Get help.
There is a real reluctance to reach out for help, and people sometimes wait too long until there is a crisis. The sooner you can surround yourself with the right team and really take a team approach, the better off you'll be. Get the right legal framework and accounting framework in place. People consider that an expense, when in fact, during the early days, it's really an investment.
Monitor your progress.
You have to make sure you're surrounded with the right teammates who can help you monitor your progress. If you grow too fast, you'll grow yourself right out of business. If you grow very slowly, you run the risk of becoming stagnant. You have to make sure you have a consistent market and sales plan in place and watch the numbers and profitability on a regular basis to know when and where to reinvest. Entrepreneurs and small business owners are usually not savvy enough to know when to do that themselves.
Need some motivation? See how one woman turned a cocktail party into a million-dollar business.
From an owner's compensation perspective, they tend to take too little, too long or too much too soon. They either sacrifice themselves in hopes of some pot at the end of rainbow (and work around the clock for little or nothing and burn out), or they drain the business of cash. For example, a corporate executive who's used to earning $100,000 year will start a business and want to replace that income. She'll start sucking money out of the business prematurely and never have enough to reinvest back in during the early stages. The key is finding the right target point of compensation, find a blend between not killing yourself and not overpaying yourself either. Reach out to a small business adviser to get an idea of what your salary should be.
Get help.
There is a real reluctance to reach out for help, and people sometimes wait too long until there is a crisis. The sooner you can surround yourself with the right team and really take a team approach, the better off you'll be. Get the right legal framework and accounting framework in place. People consider that an expense, when in fact, during the early days, it's really an investment.
Monitor your progress.
You have to make sure you're surrounded with the right teammates who can help you monitor your progress. If you grow too fast, you'll grow yourself right out of business. If you grow very slowly, you run the risk of becoming stagnant. You have to make sure you have a consistent market and sales plan in place and watch the numbers and profitability on a regular basis to know when and where to reinvest. Entrepreneurs and small business owners are usually not savvy enough to know when to do that themselves.
Need some motivation? See how one woman turned a cocktail party into a million-dollar business.
Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.
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