Blogs

Important Decisions to Make as a Small Business

By James Mellor posted 06-12-2019 23:57

  

When you are starting as a small business, there are many different and very important decisions that you will need to make. Anything from finances and strategy to staffing and day-to-day operations.

As a small business owner, you tend to wear many hats from the beginning, especially if you have a small team or are operating on your own.

Your title is not simply “business owner” or “director” but rather you take on all kinds of titles like HR managers, marketer, finance manager, operations manager and any other department that may be necessary to run a successful small business.

With so much going on, it can be difficult to pinpoint which decisions are the important ones that will drive profits, and which are unnecessary and can be put aside.

Let’s take a look at five of the most important types of decisions that small business owners need to make:

Structural Decisions

Before operating, you will need to decide what type of business structure you will use, such as an LLC, a sole proprietorship or a general partnership. The type of structure will govern various aspects of your business.

Based on the type of structure you choose; you will have differing profit and cost-sharing as well as liability and how you file your taxes.

Strategic Decisions

These decisions are long term ones that will affect the business’ profitability for years to come. Strategic decisions refer to choosing what products or services to offer or the choice to create alliances with other businesses to create joint ventures.

Joint ventures usually come with some risk should the alliance not be successful. An unsuccessful strategic decision could leave you in a lurch that causes your business to shut down or start over again.

Financial Decisions

The reason you start a business in the first place is to make money, so there is no surprise that financial decisions are top of this list. In the beginning, you need to make decisions about how to fund the venture until it becomes profitable.

Then you will move on to how you are going to manage and keep track of outgoing expenses and incoming payments, how you will manage taxes and acquire new assets.

You will need to decide how you will take payments, where it be cash only, accept electronic payments or use a credit card processing service. The decision to bring on an accountant to manage finances and a tax practitioner to ensure your taxes are all in order.

Operational Decisions

Operations have to do with how you run the business from day to day. It is more than simple administrative activities bit also includes how you distribute your products or deliver your services; which suppliers you will use for the items you require to operate and how your offering will be marketed to the right audience.

These decisions will govern your operational costs, which can affect profitability. Operational decisions also, therefore, directly affect your sales revenue. It is important to make operational decisions wisely to run a sustainable business.

Staffing Decisions

One of the greatest assets a small business can have is a team of competent employees. It is your responsibility as a small business owner to recruit and hire the right people for the positions that you need to fill in order to operate successfully.

In the case of having a human resources manager to hire staff on your behalf, you will need to have hiring criteria and methods spelled out for him or her to use as a reference. This should include detailed explanations of employees’ job descriptions, roles in the business and their responsibilities.

0 comments
1 view

Permalink