Everyone who has ever started their own business will tell you that it’s a hard slog from morning until night for the first few years. That’s part of the reason so many businesses fail in the first two years; most people just can’t maintain the level of commitment for more than a few months in some cases, but a year tends to be a major sticking point for those who do make it to the first rounds of accounts with HMRC.
Some people spend so much time working on their business and making sure they tick over, the end of the first year when the accounts are toted up is a revelation that is difficult to bear. Despite all the obvious negatives and hard work, every business leader that makes it to a rich list started somewhere. Here’s what they all had in common.
1. Planning and Execution
Planning is everything in business. Knowing where you are now, where you will be in six months-time and how you are going to get there are crucial to the success of every campaign. Planning your finances and your resources are just the beginning; the execution of the plan is often the hardest part because it’s too difficult for many people to stay on top of their paperwork and monitor where there are in relation to their goals. Using the correct software helps because you can automate a lot of the process that take a lot of time, but you need to make sure you know what you are using. Click the link for a great post from Business Cash Advance to show you the best free finance software every business needs.
2. Access to Finance
If you’ve done the planning properly, shortfalls in cash flow will not be a problem for your business. If you can plan for shortfalls you can either put some contingency plans in place to avoid them or you can arrange finance on at a favourable rate. Try to arrange finance last minute or go for short-term loans and you will general pay more because for one your books are probably not very attractive to potential lenders and two, you have much fewer options and may need to take whatever is on offer.
All businesses operate with some level of debt, but making bad debt decisions is a reason most business owners fail. Over-exposing your business to debt commitments is a sure-fire way of crippling your ability to operate, but not borrowing enough or not borrowing when you should is equally as bad for business. It takes courage to start a business, but you need to maintain the courage level and make brave decisions every day when you are the person in charge.
3. Assuming too Many Roles
When your business is your brainchild, it can feel like there is nobody else more capable of handling every aspect of your enterprise, but that is why some businesses never progress. It’s important to surround yourself with capable people and put your faith in your ability to recruit good staff rather than having to be hands-on until the end of days. A business is only as good as its people, so your staff need to believe in your great idea and ideals if your business is going to put you on the rich list one day.
Shaun Thomas is a former financial advisor and current director of two companies and has learnt and practices everything he preaches on his blogs.