Are you starting a new business? Well, doubtless you’ve done lots of reading to find out what you can learn from those who have gone before you. But, aside from the obvious classic advice like “create the product people want to buy, not the product you want to sell”, what do you need to know as you begin your business venture?
Focus on your cash flow
You might think that you need to be seeing decent profit margins in order to be a successful start-up. But that’s simply not true (or at least, it’s not the whole picture). Cash flow is actually far more important, as having available funds to keep running your business is the single largest factor in whether your business will exist in a year from now. So, invest in good cash flow management software or get very familiar with your spreadsheet – cash flow is not something you want to overlook.
Keep your overheads to a minimum
Of course, avoiding problems with cash flow is only half the battle: you need to keep your spending to a minimum if you don’t want to be continually topping up your business bank accounts. So, look for ways to cut your overheads. For instance, buy office supplies such as desks, chairs and computers second-hand, and consider whether you need office space at all. For example, if your start-up consists of you and a few other people, why not work in a business hub, rent a space once a week, or even work at home while you’re getting your business off the ground?
Overestimate your expenses and underestimate your revenue
There’s no doubt you’ll need a positive, ‘can-do’ attitude if your start up is going to be successful, but that doesn’t mean it’s OK to be naïve. When you’re budgeting or forecasting how you think business is going to go, it pays to overestimate your expenses and underestimate your revenue. It doesn’t mean you’re accepting limited revenue, but it does mean that you have some ‘wriggle room’ if you need it.
Iron out the kinks while you still have time to
If there’s one thing established businesses know, is that there’s never enough time in the day to achieve everything you want to achieve. This becomes ever-more true as businesses progresses, with your to-do list mainly consisting of urgent tasks. Once you’ve reached this stage you’ll find it hard to things that are essential but don’t directly bring in profit, such as defining processes, streamlining your software and investing in the right kind of hardware and materials you need to run the administrative side of things. So, from picking CRM tools to buying the right check window envelopes, sort it all out now: you’ll thank yourself later!
Find a mentor
It doesn’t matter how old, young, experienced or new to this you are – everyone can benefit from a good mentor. See if you can find someone to coach you through the early stages of getting your start up off the ground – their advice could be invaluable and, as well as their opinion, you may get to benefit from their networks too.
Ultimately, prepare as best as you can. There are no guarantees in business, but taking these five tips seriously could mean the difference between a bumpy ride or an exciting path to success.