Are you aware of the obstacles in your way as a small business owner?
You’ve probably been told before about how often start-ups fail. Some say 90% of new businesses fail, while other sources claim more than half go under in their first year. Although these stats are usually exaggerated to grab attention, there’s some truth behind them. But most of the causes of failure are avoidable. Here, we provide some handy tips, helping you to prove the cynics wrong.
Make the most of apprenticeships and internships
Start-ups often fail because they try to run before they can walk. With optimistic business projections in hand, they pay a recruitment company to put together a team of experts. But those experts are expensive. And, when cash-flow becomes tight, those experts become a major issue.
Instead, look into apprenticeships and internships. You’ll pay much lower wages, and you’ll be able to get financial support from the government. Plus you’ll be doing your bit to help unemployment in the local area – it really is win-win.
Find out more about apprenticeships in our detailed guide.
A lot of start-ups fail simply because of overconfidence.
Trading when a business starts is normally positive – launched with fanfare and support from family and friends in the community. So it’s easy to get carried away as a business-owner.
But arrogance is dangerous. Staying humble means focusing only on the things that matter; things like the quality of your products and the service you provide to customers.
Control your costs
When your business is up and running your focus is probably on growth and profits. And as a result, it’s easy to ignore your overheads, despite the fact that they’re far easier to control.
Cutting your costs is worth time and effort. Take energy bills, for example. Gas and electricity is typically the second-biggest monthly bill for a small business. And yet start-ups don’t often look for a cheaper deal. If you bought energy through XLN, for example, you could save 40%.
Then imagine how much you could save if you did that for every expense – phone, broadband, insurance, equipment and much more besides. In your first few years, these savings could be the difference between failure and success.
Prioritise your goals
It’s impossible to overestimate how vital your time is when you start a business.
So, you need to set clear goals that are prioritised logically; in other words, goals that are listed in order of financial value. Stick to this priority list even when it’s tempting not to, because to survive, you have to focus on your bottom line. Leave the blue-sky thinking for the future.
Outsource certain tasks
A small business has many of the same needs as a big one, but typically with only a fraction of the budget.
So, when you need HR, marketing and administrative support, you need to be smart about how you obtain it. The freelance and outsourcing market is booming, and it’s often possible to meet your growing needs without recruiting several full-time employees.
You can go about this in one of two ways. You can either look for a specific business or agency that offers outsourcing of certain functions, like HR; companies like this are in plentiful supply. Or, you can head to one of many websites in which freelancers can be directly acquired on a short-term basis – a good example is People Per Hour.
Don’t be afraid to change course
Small businesses are nimble and agile in a way that big businesses can only dream of. And it allows small businesses to change course quickly when they need to.
In many ways it’s your trump card, and you should never be afraid to play it. Things happen early in a business’ life that are difficult to plan for, and changing course allows you to limit the damage.
There are few things more hazardous for a start-up than unreasonably high utility bills. But if you’re with BT or one of the ‘big six’ energy suppliers, that’s exactly what you’re dealing with. See what you could save by switching to XLN.