Starting up a new business is a time of mixed emotions you’ll be nervous, excited, proud and confident. However, that last one might not last very long if you don’t get a solid foundation set up, the risk of bankruptcy is incredibly high in your first few years and no entrepreneur wants to experience that.
According to research from Bloomberg, 8 out of 10 start-up businesses will fail in the first 18 months of their operation. So, the risk of failure and bankruptcy is high but don’t panic because you can improve your chances by following these 10 fantastic financial tips.
One of the biggest reasons start-ups fail and go bankrupt is because they don’t budget properly, if you want your business to succeed then you need to keep on top of your cash flow. You need to know exactly how much is coming in and how much is going out and what it’s being spent on. Every area should have a budget and you should always stick to it, great ideas don’t pay the bills so makes sure you keep on top of your money.
Avoid Unneeded Expenses
When you start a business, you’ll need to spend money that’s just part of getting your business up and running. But you need to make sure you’re spending that money on the right things you don’t need a huge office with an amazing view when you’re just starting out do you? Or fancy coffee machines for the staff room, remember to focus your money on what matters not on extravagant fixtures.
Have A Business Plan Ready
It surprising how many entrepreneurs start setting up a business without a plan, you should always make time to set-up a business plan first. With this you can better work out exactly what you want your business to do and better evaluate your ideas, it also gives you a way to track your goals and work out all the costs involved. So, before you do anything else get yourself a business plan drawn up.
Check Out The Competition
Yes, it might seem sneaky but this is business we’re talking about everyone does it! So, don’t be afraid to check out your competition and see what they’re doing remember your business is trying to outdo them so look at what they’re doing and see how you can improve on it.
Get Ready To Promote Your Business
Despite what Hollywood might show us not all entrepreneurs are confident, extroverts with a talent for showmanship. That’s OK but no matter how much you hate it you’re going to have to tackle that problem a get ready to promote your business yourself at least for a while. PR firms are not an expense most start-ups can afford so you’ll be doing the promoting on your own.
Use Social Media
Social media is an amazing tool for all kinds of purposes especially promotion, but it can also be used for marketing research and much more. So, get your business on social media as quickly as possible and remember to try and update regularly.
Research Your Customers
Just like researching your competition getting to know your customers will help your start-up business gain a huge advantage. You need to know how to attract customers from your key demographics and understand how they operate. You should be researching your customers all the time, while your business is still in development and after it’s been set-up.
Know What You’re Getting Into
Setting up a business is hard, now you might be thinking “tell me something I don’t know” but few entrepreneurs will be ready for what exactly that means. It will likely mean many late nights and long working days, so say goodbye to your social life for a while because you’ll be putting all your focus and effort into running your business.
Start Out Slow
If you’re setting-up a business you don’t have just jump in, you can start out slowly in fact till you’re ready you should take it slow. You don’t have to quit your job straight away after all, while you’re getting your research done and setting up your business plan you can keep working. Many start-up businesses fail because entrepreneurs try to rush things leading to higher costs and big mistakes when it comes to starting a business slow and steady does win the race.
Don’t Micro Manage
In the early days of your business, you’ll likely be doing many different jobs, that’s why being a jack of all trades will give you a great advantage. However, when you have the time and money to hire employees you’ll have to learn to let them do their own thing. Micro managing will take up too much or your time and won’t create a good working environment. It will be difficult for entrepreneurs to take a back step but if you want your business to succeed then you’ll need to learn to do it.