Need business advice? Six strategies for success from the experts at the Small Business Development Center
“Right now, people feel like their business is controlling them,” says Larry Hebert, who was a national Sales Manager for Reebok International, Director of Pepperdine University’s NorCal Executive MBA program, and also owned a small chain of athletic footwear and apparel shops in Northern California. “Most people don’t manage their business; their business manages them. But it’s all fixable!”
Hebert is now an Advisor for the Small Business Development Center (SBDC) in Santa Cruz County. Specializing in retail, finance, management, and operations, Hebert has worked with and advised hundreds of small businesses, including Botanic and Lux and Fiber, in the area.
With the pandemic limiting resources, business owners need to be careful with how they’re pivoting. Hebert and his fellow advisors work tirelessly advising local small businesses, looking under the hood to see what’s working and what isn’t. Below are those insights:
Tip one - Focus on the problem, not the solution
One of the two most common mistakes that Hebert’s colleague Keith Holtaway sees as a business strategist for the SBDC is that small business owners focus on their solution, (which contracts creativity), rather than focusing on the problem. Focusing on the problem opens the mind to possibilities and encourages flexibility.
Tip two - Understand your business’s financial statements - or hire a bookkeeper
Both Hebert and Holtaway emphasize another common, fatal mistake: most people don’t keep accurate financial statements or understand them. Financial statements tell you a story about your business with numbers instead of words; they provide you the opportunity to recognize issues, the ability to make changes and find solutions before they occur.
If you don’t have the expertise, consider hiring a bookkeeper. If it’s hard to grow your business just from the cash you’re generating -- have a strong banking relationship, and if possible, a line of credit.
Tip three - Have an HR strategy
Being prepared begins with examining your business strategy and financials, and if you have employees, HR is another area not to let slip. Wrongful termination suits can cost upwards of $300K.
If I were starting a business and I didn’t know about HR, the smart thing would be to sit down with an HR advisor at the SBDC or sit down with a labor law attorney.
— Joy Hallof
Hallof has been in HR for 40 plus years working with startups and big corporations and has been an advisor with the SBDC for 18 years. Furthermore, she recommends The HR Quick Guide for CA Employers as the cheapest and most detailed resource of information that should be on everyone’s desk. Also, be in touch with your local EDD office that offers training on labor laws.
Tip four - Update your hours online and invest in marketing
2020 saw a considerable improvement of small businesses keeping their hours updated on Google listing, Yelp, Nextdoor, and other social sites. Small business advocate and marketing advisor Bryce Root suggests going the extra mile and providing experiential details, such as a walkthrough video that will take out the guesswork and help customers know what to expect.
Additionally, storytelling or brand work can differentiate yourself and share why you are worth shopping with rather than the ease of shopping on Amazon.
Tip five - Plan ahead: create budget forecasts
Creating a forecasted budget for cash flow and profitability needs to be done every month for twelve months. This will identify all areas of cash anticipated to come in, and all cash projected to be spent for operating expenses as well as non-operating expenses (draws, principal loan payments, capital investment, etc). This will help in understanding your cash position and needs, and proactively create strategies if a future problem exists so a solution can be found before it occurs.
Critical strategy and finance questions to ask yourself:
- Do you have your controllable costs down to the percentage of sales, so you know if you’re consistent?
- If you’re a product-based business, do you use an Open-to-Buy inventory purchasing system to manage purchases and ensure you are aligning inventory categories with sales categories to maximize the investment?
- Are you getting an accurate profit and loss and balance sheet every month and making decisions based on that information?
- Do you have both a long-term and an intermediary 90-day sales planning canvas that will help you identify markets, pivot, and determine if a strategy will be profitable?
Tip six: Research and apply for loans
The National Development Council Economic Development Lending is offering economic relief for small businesses in Santa Cruz County impacted by the COVID-19 virus. Currently, the COVID-19 Emergency Loans up to $50,000 and Recovery & Growth Loans up to $500,000 are available. Learn more and apply here.
It’s hard to prepare for a future you cannot see. You can hope for the best and react as situations arise, or you can increase your chances of thriving by putting proactive plans (or fail-safes) into place. Thanks to tax dollars and community investment, the SBDC offers highly skilled and dedicated bilingual advisors from every area of business to assist small businesses for free.
About the SBDC
The Santa Cruz Small Business Development Center is part of a 40-year national legacy committed to small business success, and has helped numerous businesses grow and succeed during the past year. As a direct result of the SBDC’s services, Santa Cruz County Businesses reported in 2020:
3,735 jobs supported (created and retained)
37 businesses created
$10.3 million increase in sales
$7 million in loans and equity
The advisors live and breathe in the trends of retail, restaurants, consultants, and services, and beyond. With unparalleled access to no-cost expertise from entrepreneurs who have seen it all, Santa Cruz SBDC provides small businesses with the solutions they seek and the confidence they need to realize their dreams.
It just takes 5 minutes to start transforming your businessBecome a client for free and gain access to our vast network of experts who will help with your business goals.