It’s a startling truth that over a third of new businesses don’t make it to their third anniversary. Too many would-be entrepreneurs pour ideas, enthusiasm and hard cash into commercial activities that don’t produce the profits they’d hoped for.
The result is growing frustration and anxiety, followed by closure and disappointment.
Here are our tips for surviving those crucial first three years.
Know your market inside out
It’s easy for the aspiring business owner to be so full of enthusiasm for their idea that they neglect to research their market.
There are a host of factors to consider. What’s the best location? Who would choose to buy from us? Are we different from the competition? How much should we budget for marketing? These are just some of the many questions that need a down-to-earth answer.
There’s no substitute for taking a long, hard look into the state of the market for your product and being commercially realistic about what it will take for your new business to break in.
Double your predicted costs and cut your predicted sales in half
That may sound a little extreme, but for some start-ups, it’s reality. Over-optimism is a common problem for owners of new businesses, who find it easy to see opportunities for income and have a blind spot for costs.
Be prepared for expenditure you did not expect, while at the same time planning for sales to grow slowly. That way you stand a better chance of the business meeting, or even exceeding, your expectations.
Learn from the mistakes of others
Many small business owners admit that they would do things differently if they could start again. Learning from other businesses where they went wrong is going to be considerably cheaper and less stressful than making the same mistakes yourself.
Make time to speak with other business owners and ask them what they learned from the start-up experience. Even if your business is already running, you could benefit from what others have to say.
Find a way to take worry out of your cash flow
The majority of new business owners find dealing with their finances very stressful. Many are not naturally good with figures, making it even harder.
One way to relieve this pressure is to work with someone who is good with numbers, and who can help you predict what will happen to cash flow in the months ahead, perhaps Video Testimonial – Right Track Recruitment