Starting in Business?
So what makes a business succeed? Being in the right place at the right time helps – some might call it luck but the true entrepreneur has done all his research and has established his potential beforehand. Having a good idea is a wonderful start but it is only a start. You need to research, plan and prepare and if necessary go through the process again and again until you have done everything possible to be sure of success. Remember there will still be unexpected setbacks and the successful business will have strategies and resources in place to cope. Some tips:
Stick to a business you are familiar with or have detailed knowledge of.
Make sure there is a market for your business and you know how to reach it.
Make sure that within a reasonable time you can expect to achieve sufficient income to meet your needs, pay taxes and contribute to a rainy day fund.
Reduce personal outgoings to a minimum – NOW.
Put together a business plan.
Listen to everyone including a solicitor, bank manager and an accountant.
Select a suitable business “vehicle” – sole trader, company, partnership etc. Should there be more than one?
Set up costs – Minimize.
Be sure of your numbers – prices that can be achieved – realistic costs.
Buy second hand and preserve your cash funds for growing the business itself.
Can “better” be achieved for “less outlay”?
Include a cash flow forecast in the plan – remember profit does not pay bills – only cash can do this. Look at ways of paying only after you have been paid.
Predict the overdraft you might need.
Register for taxes in good time.
Be disciplined. Be prepared to say “No”.
Make sure that you will be paid – any cause for doubt and nothing less than cash up front will do.
Pursue the right business. Decide on minimum profits or hourly rates that you will accept.
Remember that “Loss Leaders Lead to Losses”.
Only grow on the strength of your quality clients.
Set targets for 12 months, 2 years, 5 years etc and revise them.
Keep referring to the plan, monitor progress and revise. Monitoring will help you see (good and bad) situations sooner and enable you to respond more quickly.
The business will start off small but as it grows consider outsourcing options before investing in premises or taking on staff – i.e. make sure the business is there first.
Be prepared to decline troublesome business to free up capacity for good clients.
Keep good and up to date records. Better Books = Better Business = Better Life.
Your challenge is to:
o Survive and build a solid platform from which expansion is a viable option
o Minimize risk
o Improve your quality of life and that of your family
There is a lot to consider and most important of all is the consideration beforehand. Never be ashamed to ask advice – advice can have a profoundly favourable impact on a business.
For those looking towards self employment now could well be an opportune moment. As large firms close or pull out of markets they leave good business behind. The plus side of the current situation could well be that there is more business for the small firms to chase than before!
One successful businessman was heard to say “I’ve been told I’m lucky. Isn’t it strange? The harder I try, the luckier I become!” We can all be like him if we apply ourselves properly.