The failure rate of small businesses in the United States is staggering. And most failed businesses can attribute their lack of success to the owner’s lack of understanding of basic business principles. Providing quality goods and services in a timely manner is just the first step in running a successful business. As the business owner, your job is to manage the success of the business. One way to do that is watching the company’s operating cycle. Your operating cycle is the time it takes from producing a product or service to collecting the payment from the customer. The longer your operating cycle, the better your chances of having cash flow problems. As the business owner, you must decrease the amount of time to collect your receivables to become and remain a healthy company. Take time and regularly review your accounts receivables. Don’t become another failed small business.
Being a business owner is hard. It’s like the old maxim. You avoid mistakes through your experience. You gain experience by making mistakes. By owning a business, you are guaranteeing yourself a fair number of mistakes. Embrace it. If you have never owned a business, you can never understand the struggle. So, if you are considering starting a business, be careful what you wish for. There is no experience quite like borrowing money to make this week’s payroll. Sometimes you will wonder why you bothered starting your company at all. Building a business is a struggle. You struggle to build something out of nothing. To impart some of your vision on the world. And to try and make the world a better place. As you struggle, strive to build a company where great people come together to make great things happen. You struggle, but you can also win.