Owning a small business means more freedom and independence, but it can also mean more stress, risk, and uncertainty. If you’re starting a small business—whether you’re about to launch or you’re just in the incubator stages—read on for some proven approaches to best practices you can adopt for greater odds of success.

Aim for Quality Over Quantity

The phrase “quality over quantity” is apt when it comes to starting a business. Focus on doing a few things well, with skill and care, rather than attempt to take on too much at once. This approach allows your business to offer outstanding goods and services to targeted clients who have genuine interests in what you’re offering. You will be laying the foundation for an organic, loyal, and enduring customer base.

Determine the Best Legal Structure for Your Business

The type of legal structure you choose for your business is key to determining how much you pay in taxes, the amount of paperwork you are required to do for your business, the personal liability you could face, and the types of activities you can engage in, such as raising capital. The four principal forms of business structures in the United States are:

• sole proprietorship
• partnership
• limited liability company
• corporation

Before deciding on the appropriate legal structure for your organization, you should be well versed on the features of each business structure and have a clear understanding of your business’s goals and needs.

Know the Whole Picture of Your Financial Realties

If you want to be able to identify potential problems on the horizon, or spot possible growth opportunities when they arise, it’s imperative that you have a firm grasp on your business’s financial story. Of course, accurate accounting is crucial for taxes, bookkeeping, and calculating profit margins, but knowing the numbers can also give you a greater depth of knowledge when it comes to making business decisions on a day-to-day basis. For this reason, even if you have an accountant to handle the books, make sure you have a consistent pulse on your business’s cash flow.

Be Prepared for Unexpected Costs with a Healthy Cash Buffer

Surprise costs are going to happen, and you need to be financially prepared. If your business isn’t in a position to be able to absorb the costs from an unexpected event, it may not survive. A study by JPMorgan Chase Institute found that approximately 50% of small businesses are functioning with a cash buffer of fewer than 15 days. The importance of cash liquidity can’t be overstated, especially for small or newly established businesses. Whether equipment breaks down, the cost of supplies increases, businesses are forced to lockdown due to a novelty virus, or a myriad of other pop-up surprises, cash savings can safeguard your business against devastating loss of revenue.

Know Your Likelihood of Success

You might have identified a niche market for goods or services, and you might have the drive and the work ethic to get your idea off the ground. However, you’re likely going to need to secure financing from a bank or investors, which means you’ll need to have done your research. Don’t be afraid to get into the weeds with the data and numbers to really determine if your idea has a likelihood of success. You’re going to need the data to prove to financial backers that your idea shows real indication of success.