21st Century Small Business Practices

Many small businesses want to stay small. These don’t get a lot of attention, because people are so interested in the huge success stories – the software company that started in the garage, the marketing firm started by one guy that now employs 500. But these are outliers in the story of world business. Many people are perfectly happy running their little coffee shop, their niche publishing house. They employ a handful of people, live a happy life, and don’t have plans for expansion.

 

This is a great thing, but as most of these businesses operate beneath the threshold necessary to take advantage of the economics of scale, they all need to make sure that their practices are free from inefficiency. By becoming “finely oiled machines” a small business can run forever, without ever expanding. In order to make this happen, these businesses must evolve within, not expand without. There are a few 21st century business practices that can keep them relevant while they remain small and agile.

 

1)    Credit Card Processing. It boggles the mind how many businesses still remain cash-only. This makes sense to this writer, if it’s 1998. But in the year 2014, there are just too many good card processing options to have it make sense. And yet, many places won’t take cards. Perhaps unwittingly, these places of business are alienating part of their potential customer base. Some percentage of their prospective customers are going to try out the business, with credit card in hand, only to be turned away at the counter, at best – referred to a nearby ATM, at worst – turned to the door they entered. Today’s customers cannot be reasonably expected to carry cash. Businesses and shops take cash-only at their very real peril.

 

2)    Real Accounting. Many small businesses do a kind of hand-to-mouth accounting. Dollars slip through the proverbial cracks, but because of low overhead, the lights always stay on. Many of these business owners have a survivor’s mentality. They remain open, despite the odds, and the owners couldn’t really tell you how or why. This is no way to approach a business meant to last for years. Today’s accounting software offerings leave no cent unaccounted for. Payroll, inventory, orders, deliveries, client databases, and much more are all at your fingertips al the time. Even if your pen and paper system works pretty well, there are likely financial realities that are slipping by. Tighten your grip on your small business finances with dedicated accounting software.

These are just two suggestions, but if every small business adopted them, fewer businesses would close. It should be no surprise that both of these suggestions deal with the way money is handled, accepted, and tabulated. It’s in these little details that businesses rise and fall. If your business doesn’t currently employ these standards, bring these practices into your fold this year. You’ll be glad you did and you’ll be much more likely to be open this time next year.

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