Setting up your own business was never going to be a walk in the park. Even if you have previous experience working in the same market, there will be lots of tasks associated with running the business that will each have their own learning curve.
But you shouldn’t be afraid to make mistakes on the job; in your first year, you’ll probably make at least one every day. But the least we can do is give you a heads-up about the biggest offenders: the mistakes that plague every young business and keep owners awake at night. So without any further ado, let’s look at some of the best ways to save you some sleep.
Poor Finance Management
You might have an excellent product, a great team, and a loyal customer base who lap up everything you throw at them, but if your finances aren’t in order, your business will fail.
For many first-time entrepreneurs, finances are the most intimidating part of running a business, which is understandable, really. Lots of professionals typically found their startups with plenty of experience from an operational standpoint and with a strong understanding of the sector, but finances? They’re a blind spot – a very stressful one at that.
But just because finances are stressful, it doesn’t mean they’re complicated. If you’re struggling to keep track of what’s what, here are some of the basics:
- Revenue: The total income a business generates before expenses are deducted.
- Profit: The total income a business generates after all expenses, taxes and other costs are deducted.
- Fixed Costs: Expenses that remain the same, like staff wages and rent payments.
- Variable Costs: Expenses that change based on activity, like printer ink and travel costs.
- Cashflow: The money coming into the business versus the money going out in a certain period of time.
A Poor Business Plan
It’s your first time writing a business plan, so do you expect it to be perfect the first time around? Even if you have the best intentions and do plenty of research, it’s still an absolute minefield.
First off, who are you writing it for? No, not for the bank or other investors. It’s for you. It’s a plan that dives into the details of your strengths and weaknesses, objectives, and projections. You don’t need to cram in buzzwords and other laughable bits of business jargon. Instead, focus your time and energy on learning as much as possible about your business, using case studies, and being completely honest with yourself, rather than trying to inflate forecasts or lowball your marketing budget.
If you can assemble a clear strategy, you’re more likely to come across flaws with your idea or elements of execution that could save you money. For example, a construction company owner might be stressed about the upfront costs of starting the business, primarily because of the equipment he needs to buy. But, by being thorough, he’ll find himself breathing a sigh of relief when he realises he can just use a plant hire company instead; buying an entire dumper would likely cost at least £10,000, whereas dumper rental costs around £70-£100 per day.
Final Thoughts
If business was easy, everyone would be doing it. When you’ve just started your own business, you’ll be presented with a different obstacle course every day. It’ll put you out of your comfort zone, but just remember – that’s only temporary. You’ll make plenty of mistakes, but hopefully, here we’ve helped prevent you from making some of the bigger ones.
