How to keep your small business from failing.

 

Thinking about starting a small business? Join the club – 97 percent of US employer firms are small businesses, a total of 27.9 million.1

While everyone starts with a dream and the best of intentions, an uncertain economy plays a role, for sure, and some businesses just tend to tank more than others. Then there are the businesses that are exposed to structural shifts, like travel agencies and office supply stores.

But opportunity abounds in growth areas like shared services, healthcare, construction, food and hospitality, technical consulting, and senior care. So, do your homework and hedge your bets by finding a suitable growth area (shared services, for example) and the type of business that has a higher chance of success (accounting and payroll management, for example). Then, once you’ve decided on the right business for you, these five steps can help you to realize your entrepreneurial dream.

ASSESS YOUR FINANCIAL PERSONALITY

Your attitudes toward life, money, and financial decision-making will influence your entrepreneurial success. Small business owners in America tend to be Ambitious Spenders, according to recent research. They struggle with work/life balance, and while most hate to delay gratification, they still prioritize saving to grow their business and estate. Sound like you?

PRIORITIZE CASH FLOW

Over 80 percent of small businesses fail because of negative cash flow. They don’t have enough money coming in at the right time to meet their financial obligations. Making healthy cash flow a top priority will help your business weather the ups and down. Put together a forecast of anticipated payables and receivables so you’re not blind-sided, set up and enforce realistic payment terms for customers, and work with suppliers to get favorable pricing and discounts.

PROTECT AGAINST COMMON RISKS

You can forecast cash flow, but you can’t forecast disaster. Small businesses need big protection. Consider different types of disability income and life insurance policies to help safeguard your business if you were unable to work due to illness or injury, or if a key employee passed away suddenly. Property insurance may be important, depending on your business. And liability insurance will help protect you from lawsuits.

GROW THE RIGHT CULTURE

Culture isn’t just for yogurt. Successful small-business owners build a collaborative workplace environment in which employees unite behind a shared mission, values, and behaviors. Learn how to delegate effectively to others within your business and build strong personal relationships with employees, vendors and customers. It’s all about creating a positive network, inside and outside the business, that enables everyone to perform at their best.

SEEK ADVICE FROM PROFESSIONALS

Owners of high growth small businesses are more likely to rely on advice from professionals and informal business support groups than do owners of companies with declining revenue, according to our research.2 In particular successful entrepreneurs continuously work on developing their skills around strategic planning, money management, and hiring.

Starting a new business is exciting — and a huge commitment of your time and money. To discover more ways to make your dream a reality, talk with a financial representative.

For more information on Jerry’s services, he can be reached at [email protected].

www.pacificadvisors.com/jerry_maldonado

CA Insurance License #0H33733, Registered Representative Park Avenue Securities LLC (PAS). OSJ: 3585 Maple Street, Suite 140, Ventura, CA 93003, 909-399-1100. Securities products offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Pacific Advisors LLC is not an affiliate or subsidiary of PAS or Guardian. Insurance products offered through One Pacific Financial & Insurance Solutions LLC, DBA of Pacific Advisors LLC. Pacific Advisors LLC is not a registered investment advisor.

Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. 2018-54005 Exp. 2/20.

Prepared by The Guardian Life Insurance Company of America. The information contained in this article is for general, informational purposes only. Guardian, its subsidiaries, agents or employees do not give tax or legal advice. You should consult your tax or legal advisor regarding your individual situation.

 

Brought to you by The Guardian Network © 2018. The Guardian Life Insurance Company of America®, New York, NY.

2017-34333 Exp. 1/19