New book shares advice, hacks, and lessons for small business owners

Self Made Boss Co-Authors Lauren Weinberg, Square Chief Marketing Officer, and Jackie Reses, Post House Capital CEO, join Yahoo Finance Live to shine a light on the obstacles business owners must be willing to manage, managing cash flows, and anticipating economic uncertainties and supply chain issues.

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SEANA SMITH: All right. Let's talk about small businesses. Because they are so important. They are the backbone of the US economy. Our next guest, they are out with a survival guide, that is being called, giving advice to small business owners who too often don't know where to turn. Jackie Reses, she's CEO Post House Capital, also co-author of the new book "Self-Made Boss" with Lauren Weinberg, chief marketing officer at Square. It's great to have both of you here with us. Jackie, let me start with you.

When you take a look at-- you've talked to so many business owners when you were writing this book, small business owners. Give us a sense of how they're feeling today.

JACKIE RESES: Interestingly, it's been a record number of business starts. And so this has been an incredible period for small businesses coming off of COVID. And so as of today, you're seeing about 2/3 of the job growth happening in the small business community. I think while as much as there's a lot of enthusiasm around the ability to start a business right now, people are thinking through, as you've heard, the great resignation, and thinking through whether they want to actually pursue their passion.

There's a lot of questions about their ability to manage costs, ability to manage supply chain, ability to manage HR. And those are some of the types of issues that small business owners have top of mind.

RACHELLE AKUFFO: Hello, and Rachelle here. I mean, you guys interviewed people from a range of different types of businesses. Obviously, different businesses doing differently in this sort of environment. How do people know when it's time to perhaps cut their losses versus expand and hire a team, especially in an environment that's this volatile?

LAUREN WEINBERG: I'm sorry. Was that a question for me?

JACKIE RESES: Go, take it, Lauren.

LAUREN WEINBERG: Yeah, I would say it's a great question. And I think it really comes down to, I mean, we give a lot of advice in the book, which is if you are doing a lot of tasks that are preventing you from growing revenue in your business, it's a good time to think about hiring someone else and really bringing them on as opposed to calling it quits. So that's one of the topics that we talk about. It's very hard for small business owners to give up control to think about where they want to bring other people in. But there's definitely a time and a place for where additional resources can actually help you expand and grow.

SEANA SMITH: Jackie, talking about expanding and growing, on the flip side, expanding and growing doesn't always make sense for some of these companies. Remaining small might be the thing to do. How do business owners-- I guess, what's the best way for them to go about when they're trying to figure out whether they should continue to grow, or whether they should actually stand put and be fine with the size that they are today?

JACKIE RESES: Yeah, that is a full stop philosophical question for small business owners. So there's a category of businesses that always want to remain true to their craft, true to what they're doing. And they really just want it for a lifestyle business. And then there's a huge population of businesses that would like to see themselves build their business and grow. It's just a very personal decision about how you want to think through that.

But what you can do to be prepared as a small business owner is think through a plan, how would you want to grow, think through credit options. Do you have the capacity to grow with the financing available to you? And if not, where do you get it? And as you start to think through that plan, that will help you think through whether the opportunity to build your business makes sense for what you're trying to achieve in your life.

RACHELLE AKUFFO: And Lauren, obviously we've seen some of the most well-funded, well-run companies struggling this year due to things like inflation, supply chain constraints, you have uncertainty ahead. And of course, you have some of these post-pandemic consumer trends. How should startups be operating in this space? And how have their success rates changed since the peak of the pandemic when a lot of these started?

LAUREN WEINBERG: So I would say a couple things there. One is I think a lot of businesses who are starting out today should really be thinking about how they can leverage technology and automation to help them keep their staffing really lean. That's definitely one area of opportunity. There's a lot of tools, including how you can give payroll-- run your payroll directly from your point of sale.

The other thing is really just to have a strong business plan and have your finances in order. Know how much money you need to have saved, what your run rate is going to be, and really be anticipating all of those unexpected expenses that are going to coming your way. I think that's probably one of the biggest surprises for business owners and managing their cash flow.

SEANA SMITH: Jackie, when you take a look at the current environment right now, so many people when they're looking to start a business, they're faced with higher costs, not only higher costs just in terms of what they're putting into their business, but simply in their day to day lives. How would you advise small business owners who are navigating this pretty tough environment right now when there is so much uncertainty?

JACKIE RESES: Yeah, a few things. First thing you have to do is make sure you have enough capital and enough of a safety net to get through the period of time when you might have lower cash flow. And you also have to be able to deal with volatility. Particularly what's going on in the macroeconomic environment, what's happening with supply chain, you have to make sure you're not going to get yourself into trouble.

And so we run through a bunch of planning tips in the book to talk about how many months of cash flow you should have in order to give yourself a good safety net. And then once you get past that, there are a lot of tools that you can pursue to help you manage your financial success as a startup. That could be getting a credit card, it could be getting a small business loan, and it also could be how you think about just managing your operations in a tighter way than you ever should.

If ever there were a moment with all the uncertainty happening in the market, now is the time when business owners need to be prepared for that kind of volatility and make sure they're doing the mental planning and the math planning with advisors who can help them to make sure they're being smart and tight about the decisions they're making today.

SEANA SMITH: Bless you.

RACHELLE AKUFFO: Preparation, certainly key. Lots of great advice there. Our thank you to Jackie Reses, she's their CEO of Post House Capital. And Lauren Weinberg, chief marketing officer at square. And both of the coauthors of "Self-Made Boss". Thank you for your time.