Success is no accident - how to survive as a small business
Success is no accident - how to survive as a small business
As if coming up with a good business idea, finding the funding to get started and taking the huge leap of faith of giving up the safety net of being an employee wasn't enough to put you off being self employed, there's always cheerful failure statistics to keep you awake at night! Try 'Four in Ten small businesses die within five years' (www.smallbusiness.co.uk) - is that enough to make you wonder what you've done?
In an age where it seems people can make millions purely by posting pictures of themselves having dinner or videos of themselves playing a computer game it's easy to forget that us mere mortals have to actually come up with a marketable product or service! But, in reality, if you want your new business venture to see you through to retirement (or a lucrative sell off if you have really big plans) then you'll need to know that you really have found something that people want to have AND that you know how to deliver it in a better way than the competition can - even if there's no competition for your product or service when you're starting out you can bet your bottom dollar that there will be competition very quickly if you really do have a good idea!
So, once you've made your idea a reality and decided to take the gamble to make it into a business, what action can you take to give yourself a fighting chance?
Knowledge -everyone knows knowledge is king and according to Dragon's Den regular Theo Paphitis most people don't do enough -"It's about knowing more than the next guy or girl and performing better, and the only way you can do that is through knowledge" It's tempting to believe everyone else will think the same way as you because that suits what you want to do, but you shouldn't avoid listening to other people's opinions if they are part of your target market ( but be sure to avoid the naysayers who just want to warn you off because they are jealous of the idea of your success).
Never be afraid to admit you lack knowledge either - be honest with yourself about your weaknesses and your knowledge gaps and take positive action. The saying 'life is a school' was never more true than it is for an entrepreneur and you can never stop learning.
Cashflow - the most often quoted reason for failure in new businesses. Beyond making sure there's enough of a buffer to see you through the early days, even some business owners who think they're doing well can fall foul of the cashflow conundrum. Knowing exactly what your outgoings are, making sure you get paid on time by your customers and making use of payment terms offered by your suppliers are all important factors in balancing the cashflow needs of your business. You may think your business is doing well if the orders are pouring in, but if you're not managing your cashflow you can suddenly find yourself in a position where you can't stay afloat.
A good bookkeeper can make sure you have your finger on the pulse with real time financial information that is invaluable in your day to day decision making.
Innovation - research by software provider Exact suggest that UK small businesses lead the way in the adoption of new technologies. It also states that small businesses who are heavy users of cloud based solutions are achieving higher revenue growth with bigger profit margins than businesses who are limited users of cloud technology. The Federation of Small Businesses cites that 'tech savvy SME's grow faster, export more and employ more people' and that ' a lack of [technological] investment over a period of time will disadvantage businesses in many ways.' The array of cloud based software is exciting (and perhaps slightly overwhelming) and making the right choice for digital solutions can change the future of your enterprise.
Owning and running a small business certainly isn't for the faint hearted, but as the saying goes 'If it was easy, everybody would be doing it'. The risks and the hard work aren't for everybody but the rewards, both financial and personal mean that many of us could never make a return to the world of being an employee.
