The retiree’s guide to starting a business
If you’re part of the 57% of workers planning to work full-time or part-time in retirement according to a Transamerica Center for Retirement Studies survey, you might start wondering: Where to start? What should I know? Should I give it a try even when I don’t have any business management expertise?
If you had a stellar career in anything but business management, learning how to run a business of your own doesn’t have to be complicated. On the contrary, today, you can undertake projects and achieve success if you are disciplined, work hard and smart, and carry out impeccable management.
No matter how big or small your business is, you must meet certain parameters to keep it afloat, such as taking care of finances, studying sales, or making important calculations that prevent your company from going into debt or ceasing to be a profitable business.
Today, it is very common for entrepreneurs to take the administrative reins of their companies since they already know what to do, or what are the first business-level steps so everything goes as expected.
Wondering how to run a business?
If you wonder how to manage a small business successfully, then the answer is quite clear: by taking care of its administrative, financial, and accounting aspects.
Expenses, costs, sales, and even all those related to inventory, are just some of the most prominent, and by taking care of them you will be able to keep them in order. This will have positive repercussions on your company in the short, medium, and long term.
How good business management can lead you to success
Building a successful business depends on multiple factors, but one of the most important is good management. if you do not organize yourself well enough, you will be unable to develop positive management, and therefore, the future of your project or enterprise could be in danger.
However, in this article, I will tell you how to strategically manage a business through some practical, functional, and utilitarian advice.
How to run a successful business
Knowing how to manage a business is essential to achieving the stated objectives that guarantee the viability of the company, its profitability, and long-term growth. This is something you must master perfectly if you have just started, or even if you already have experience as an entrepreneur.
Now, let’s say you’ve started. This is a review on how to manage a business so you can increase your chances of succeeding.
Plan and execute good strategies:
Strategic planning is the key to success in any business idea. This means there is no room for improvisation and you must take the time to define KPIs (Key Performance Indicators), plans, goals, and qualitative and quantitative objectives that allow you to move in the right direction.
The most advisable thing is to design a business plan, as well as marketing and advertising plans that allow you to maintain a high degree of competitiveness in the market.
Otherwise, you will risk losing customers, or find it increasingly difficult to attract new potential customers. However, the biggest challenge for successful entrepreneurs is not designing all these plans, but executing and constantly updating them to ensure that everything runs smoothly.
Evaluate business performance
It is necessary to carry out constant or periodic performance evaluations of a company since only then you’ll be able to determine if you’re achieving your goals, or if there are failures that are dramatically casting you away from them.
Ideally, you review your planning and quality strategies from time to time, or else you will not be able to determine whether or not you’re being competitive in the market or if its positioning has been as expected.
By evaluating all these strategic points you will be able to have a clearer vision of the business management that you have been carrying out, which is extremely important when operating any business.
How can you evaluate the performance of your business?
Some of the questions you can ask yourself to determine the real state of your company are:
- Is the target audience of your product or service still interested in your offer?
- Are there new direct or indirect competitors that have downplayed your company’s importance or prominence in recent months?
- What is the sales volume? Has it increased? Has it decreased?
- What is the status of customer service? Are they satisfied? Are there aspects that need urgent improvement?
By answering all these questions, your work landscape will become clearer, and in the end, you’ll be able to make the pertinent corrections before it’s too late.
Taking entrepreneurship courses could be of great benefit, especially since you will acquire deeper and more specialized knowledge that will boost your management in style, a great perk during retirement!
Keep track of inventory
Especially so if you’re selling products, and no matter the size of your business, you must have good inventory control so production and distribution processes yield the expected results.
To do this, you must record the number of products you have in stock, as well as those that are available for sale. This allows you to know for sure when you should replenish or even helps you define the turnover rate with greater precision.
Knowing how to manage a business implies keeping a good record of everything because that way you avoid shortages or even the loss of potential sales due to not having enough inventory.
With this type of control, you will also be able to determine the delivery time by suppliers, order or classify your products, or know which pieces are most widely accepted in the market due to their higher sales.
Keep track of sales
To understand how to run a small business, or even a larger one, you need to learn about the sales record. Running a company or venture without having an idea of how much you sell or bill monthly is a prelude to failure.
Also, this is something you can do in a spreadsheet just by recording the products sold at the end of each business day.
Then, at the end of the month, you should review the total sales of each product to find out which was the best seller, as well as to establish the relationship between sales, costs, and profit.
Are you thinking about what business to set up? Whatever it is, you must define the fixed, variable, direct, and indirect costs, so you know how to manage a business with total efficiency.
It should be noted that fixed costs do not depend on sales (rent, service payments, salaries, etc.) and that variables depend on the product (inputs, raw materials, among others).
Direct costs are tacit or obvious, such as those related to suppliers, while the indirect ones have to do with transportation or equipment obsolescence. Keeping track of all these costs will help you keep your accounts clear, which will have a positive impact on your financial structure in the short, medium, and long term.
Cash and debt control
If you want to learn how to run your retirement business, then you should be aware of how important it is to have liquidity. This means you have enough cash to carry out transactions with customers and pay for utilities and suppliers.
In this sense, you must pay special attention to your company’s cash register, because only then will you be able to know how much cash comes in and out on a daily basis.
In a nutshell, managing the money of a business is essential to keep it afloat, and therefore, you must do your best to fulfill this job successfully.
Create a Canvas model
The Canvas model gives you an overview of the business because it covers four main areas: the offer, the clients, the infrastructure, and the economic viability.
During its completion, you must address aspects such as market segmentation, distribution channels, the company’s value proposition, relationships with your customers, sources of income, and more.
At the same time, you must be aware of debt, in the shape of payments, wages utilities, etc.
This way can you determine the number of products you must sell monthly to zero them in a clear and timely manner.
Starting a business requires a lot of work, effort, and perseverance, but remember that nothing is impossible and if you make every effort, you will reach your goals sooner rather than later.
Factors to take into account to manage a business
Undoubtedly, certain intangible factors influence good business management, so let’s draw some inspiration from the business greats.
John Maxwell, better known as the “father of leadership,” says that “leadership is influence,” and therefore, he recommends that entrepreneurs become the main leaders of their companies so that they can eventually achieve success.
This means you must show interest, empathy, and respect for your work team while motivating them to achieve your business’s common goals ethically and responsibly.
You must also lead by example, or else you will find it very difficult to demand changes or attitudes in other people that you cannot bring about on your own.
Bill Gates, believes that knowing how to run a business starts with giving the customer what they really want or need. He famously once said that “companies fail for many reasons,” but one of the most frequent is that they are not able to create the products that customers need.
In other words, they fail to satisfy them properly and therefore end up failing miserably.
Therefore, you must listen to your audience and ask yourself: what do they want? What do they like? What needs are unsatisfied? Or what can you do to satisfy them successfully?
Also, if you follow some tips from successful entrepreneurs, you could help your company get closer to its goals more quickly since their extensive business experience speaks for itself.
Innovation and adaptation to change
If you are not capable of innovating or adapting your business model to current requirements, it is most likely that you will not obtain the expected results.
Steve Jobs promoted innovation with overflowing passion, and always invited people to change, innovate, improve, or reinvent themselves regardless of whether they were leading small or large-scale projects or businesses.
If you would like to master these or other entrepreneurial skills in more depth, there are many books written by successful entrepreneurs to motivate yourself to work hard, or even achieve your life dreams at retirement age.
Tools to run a business
There are multiple software tools on the market to learn how to manage a business, which can be very useful. Let’s take a look at some of the most popular ones.
Point of Sale (POS) helps you keep a more precise sales control. You can toggle your sales by product or orders, and this way you can have a broader picture of your business’s activity.
It is of great help for business models such as restaurants or artwork, since orders are quite frequent, and therefore rotation is high.
This famous Microsoft package is extremely useful for managing a small business since it allows you to create tables or formulas to keep track of expenses, costs, debts, cash, or inventory.
You only need basic knowledge of Excel to take advantage of the full potential of these spreadsheets, which is quite practical.
You can use programs to manage your business’s bank accounts, as well as to issue invoices or manage them successfully and efficiently.
Basically, they are in charge of automating the accounting tasks of your company, which maximizes resources and significantly minimizes numerical errors.
CRM software allows you to manage your customer relationships professionally, quickly, and effectively. This is of great help when managing businesses, especially if they are large and require a lot of logistics.
In essence, it’s capable of dealing with the interactions between your company and its customers, thus strengthening its key factors, such as competitiveness or sustainability.
It’s never too late to start a business, and many retirees take the plunge and succeed. However, you have to keep in mind the basics, think of how you can align your professional experience with your entrepreneur aspirations, and be brave!