Going into business and being your own boss is the dream of a lot of people. Last year nearly half a million new businesses sprang into being, even with the difficult economic climate. But we all know that a lot of new businesses don’t go on to huge success, and in fact a large percentage fail to make it past the first two years. But if they do manage to survive that difficult teething period then success could be just around the corner.
The main cause of failure is simply poor planning. You can have the best business idea in the world, but without concrete plans in place it will quickly fall flat. It’s not enough to wing it, hoping that determination, hard work and a little luck will lead to success.
Here are four tips to help you make a success of your small business.
1. Have A Plan. Don’t think of your business plan as a formality that you have to draft up to secure that business loan or satisfy potential investors. A detailed and thorough business plan is going to help you more than anyone else. By analysing your business in detail you’ll identify potential weaknesses or problems in your product/service, your infrastructure and other aspects. This means you can avoid potential mishaps that could kill your business before it’s even taken hold. A good business plan will also serve as a solid guide as you take those first faltering steps into the commercial world.
2. Be Realistic Not Idealistic. It’s easy to get so excited by your business plans that you begin to have unrealistic expectations, and this can lead you into making poor decisions. Will you honestly be able to sell that many units in year one? Is that doubling of revenue in years two and three achievable? Maybe if everything goes to plan but what if it doesn’t? You definitely need a can-do, positive attitude when you’re going into business, but this needs to be tempered with a realistic assessment of the situation. Confidence is good, but blind confidence has ended many young companies.
3. Have A Financing Plan In Place. Often when starting a new business it’s tempting to launch the business on a barely-there budget. Sometimes that’s because of inadequate capital, or a desire to not sign over a big share of the company to outside investors. But ask yourself this: will your business be cash flow positive or negative? An example of positive cash flow is a restaurant. You can get your food supplies on credit, but receive cash payment from customers. Many businesses are negative cash flow. That is they have to pay for staff and materials up front, then complete work before being paid. Discuss financing and budgeting with your accountant.
4. Employ A Chartered Accountant. You’ll need a chartered accountant, and it really does pay to go for the best you can. Small firms may well offer enticing prices, but larger firms will not only be able to provide you with a wider range of services but will also have vast experience across sectors, giving your business the kind of support and care it needs.
This article was provided by HW Fisher chartered accountants who are a commercially astute organisation with a personal, partner-led service aimed at entrepreneurial small, medium enterprises (SMEs), large corporates and high-net worth individuals.
