1. DO I HAVE THE RIGHT SUPPORT SYSTEM FOR MY BUSINESS?
While asking for help may not be our strong suit, in business we all need a little help sometimes. It’s impossible to be an expert in marketing, accounting, legal, and everything else you need to keep your business running and flourishing. Instead of seeing these as areas of weakness, find strength in identifying where you need support. Grow your support system to include experts in these professions so you know where to go when you have concerns.
2. HAVE I SET EXPECTATIONS WITH EVERYONE?
Partners, employees, customers, independent contractors, vendors, and interns are only a few of the relationships you are building at work. Navigating these relationships seems easy at the beginning but inevitably becomes more complex over time. Have an attorney draft a legal document to set expectations for each party’s respective responsibilities, dispute resolution, and termination of the relationship.
3. HOW CAN I TAKE A PROACTIVE APPROACH TO INCREASE WORKING CAPITAL?
Does working capital seem out of reach? It’s not; let me tell you why. I’ll give you a hint it’s all in the contracts.
We all know that sometimes life happens, and you have to repair equipment unexpectedly or refund an unhappy customer. The red line continues to creep closer and closer. One of the best strategies to prepare for these situations is to increase your cash on hand, aka working capital.
- Renegotiate with your vendors. If you’ve been taking in a lot of inventory or doing a lot of business with an individual vendor, it may be time to renegotiate. Whether that means extending your payment terms to give you adequate time to sell inventory or a more tailored delivery schedule to keep inventory levels low.
- Reestablish expectations with your customers. Consider making customers’ payment due upon delivery or shortening your payment periods so your business spends less time waiting for payment to arrive after you have already delivered.
4. IS MY BUSINESS ADEQUATELY PROTECTED FROM LIABILITIES?
While operating a business has advantages it comes with its fair share of liabilities.
To adequately protect your business, you need to consider each of the following:
- Business structure. Forming a limited liability company or a corporation creates a separate and distinct entity from the founder, which limits the owner’s personal liability. However, these privileges can be lost if you don’t follow corporate formalities, comingle expenses, or act recklessly.
- Contracts. Contracts are a great vehicle for allocating and limiting liabilities. The general rule is that the liabilities should belong to the party better-suited to protect against the risk.
- Insurance. The right combination of insurance coverage can protect your business against a wide range of potential liabilities. Be sure you know what those potential liabilities are.
5. DO I KNOW WHAT I AM SIGNING?
We are inundated with “agree to these terms and conditions” from your I-Phone updates to your gym memberships, but are you paying attention when it counts? Ensure you understand not only what you are agreeing to today, but how that agreement may impact the goals you have set for your business tomorrow, next month, or next year.