Thursday, July 11th, 2013 by Laurie Taylor
3 Mistakes to Avoid When Running Your Own Business
By New CopsAlive.com Contributor Laurie Taylor
Laurie has been a good friend of CopsAlive.com for many years and in fact we interviewed her in July 2009 about the “5 Critical Concepts You Must Know to Start a Business” and her interview was met with such an outstanding response that we have asked her to become a regular contributor on CopsAlive.com for issues related to the successful operation of a business. Why is that important to me as a police officer you ask? We believe that one way to successfully navigate this very toxic career in law enforcement is to always have a back-up plan. One very effective back-up plan for cops is to start your own business while you are still working and grow it into an successful money maker so that if you ever need to, or want to, retire it will be there to protect you.
If you are a law enforcement professional and are running your own business and you think you need to spend more money on marketing, or to hire a sales person, or to buy the latest and greatness gadget for your business, I have some advice for you. STOP!
As a police officer or other law enforcement officer I know that having a financial back-up plan is important to you and starting or… running your own small business may be the way to go. Here are 3 of the biggest mistakes business owners make every day. Get these nailed and then start planning your next steps toward business success.
Mistake #1: Not knowing the costs of running your business.
You have to know what it costs you to keep the doors of your business open. Guessing isn’t an option. I worked with a business owner who was five years into her business and was struggling to turn a profit. Each time I asked her ‘what does it cost you each month to run your business’? After giving me excuses such as, ‘I don’t have time to worry about that, I need to be focused on sales’, or ‘I have a good idea’, or ‘I put everything on credit cards’ (as if that solved the problem). The reality was this: once we spent the time and dissected her costs, they were over $2000 a month more than what she thought they were. ‘No wonder I’m not making any money’ was her reality check. Don’t delay. Figure this one out now.
Mistake #2: Not projecting the amount of sales you intend to drive into your business every month.
If you aren’t creating a profit plan for your business, you are flying an airplane without an altimeter and you will crash. It’s just a matter of time. A profit plan is my name for a budget. But since the ‘b’ word only causes business owners to run from the room screaming, I prefer to ask business owners if they would like to create a plan to be profitable. A profit plan forces you to be real. Once you know what it costs you to run your business (see Mistake #1) you know that you have to bring in at least that amount of money every month to breakeven. By projecting your revenues over a 12 month period, you’ll know immediately what’s working and what isn’t by comparing your projections to your actuals.
Mistake #3: Not understanding how fast your cash is coming into your business and going out of your business every day.
When I’m talking with small business owners, I ask two questions: Do you know how much cash you have in the bank today? Do you know how much cash you’ll have in the bank next week? Knowing the answers to these two questions is what drives successful businesses. Cash IS king. But too many business owners treat it like a distant (and not much loved) relative! Managing your cash flow, when cash is coming into your business and when cash is going out of your business, is the #1 focus for any business owner. If you aren’t managing your cash, you aren’t managing your business.
While the financials aren’t the sexiest part of your business, they are the most critical.
If you become passionate about the financial aspects of your business, you’ll always have a business to be passionate about.
For more great business advice join me on July 23rd for a free webinar at 10 a.m. (PDT) called “Business or Expensive Hobby: Is your business making you or breaking you?” To register visit: http://businessorhobby.eventbrite.com/.
Look for more of Laurie’s wisdom here on CopsAlive.com in the future!
Laurie Taylor is a business growth specialist and President of FlashPoint! She works with business leaders to help them get focused on the right things at the right time, and create or recreate their vision, mission and values and ultimately, their passion She provides solutions to help you grow and manage your business. She knows the challenges that business owners face every day trying to manage all the pieces and parts of their business. She took a marketing communications business from 2 employees up to 104 employees, up to $12 million in sales and now she helps other entrepreneurs grow and develop their own businesses. Committed to helping business owners succeed, Laurie’s real-time experience in starting and growing a business taps into the realities of leadership and management the two hardest aspects of running any business. If you replay our previous interview with Laurie you will be able to tap into her experience and learn the “5 Critical Concepts You Must Know to Start a Business”.
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