Starting a business is an incredibly daunting, but exciting journey. For some, it may be their biggest achievement, or a lifelong dream.
Unfortunately, 20% of startups don’t make it past their first year, and a staggering 60% go bust within their first three years. While passion can fuel success, it can be risky if you don’t give yourself the time to think decisions through. If you’ve started a business or are thinking about making the jump, here are some tips that are important to consider to ensure your business reaches its goals.
Don’t underestimate the costs
Online business service, Geniac, reported that 64% of small businesses admitted they had been hit with unexpected costs in their first year. Some business owners think that technology, equipment and marketing services are only high quality if they spend a lot of money on it. However, starting a business may not need a large investment.
If you’re willing to dig a little deeper, you can find options that are equally high quality, but are lower in costs. It’s extremely helpful to create and stick to a business budget to avoid overspending and being more realistic with your business options.
By initially estimating higher costs and a lower revenue, you are more likely to meet your budget plans, survive and grow, compared to entrepreneurs who set a lower budget and run out of money too soon.
What you can do: Drafting a budget is a key way to help you turn your dreams for business success into reality. By using an excel spreadsheet, you can estimate all the expenses and potential losses you will incur, determine how much cash you’ll need beyond the first few months, and it can also remind you when you are reaching your limit before you start to overspend.
There are many free templates you can access online which can be tailored to your business and its outgoings. While making a business budget can be tedious, it is there to make sure your business and most importantly, your passion, can stay afloat in the long run.
Don’t ignore your customers
All the hard work you put into your business is in order to gain customers. So the last thing you should do is ignore them. In today’s society, a single bad customer experience could ruin a business’s reputation and could be a big threat to the future of a startup business. In fact, 14% of businesses fail due to ignoring customers’ needs. Therefore, your customer’s interests should be an integral part of your business. Understanding their needs and desires as a potential buyer is vital to building a product that people want.
What you can do: When asking for feedback, it’s important that you consider the best way to approach your customers. Why not try and send a follow up email for customers who have bought or received a service from you in the past?
Social media is a great way to get in touch with customers. Customers are constantly actively participating on social media platforms, providing both an inexpensive and efficient way to target your audience.
Alternatively, it’s important to show appreciation for loyal customers by offering incentives or special discounts to ensure you solidify a strong business relationship. By having a genuine interest in the customer, you are showing that your business is making a conscious effort to meet their needs every time.
Don’t always play it safe
Taking risks is important when trying to move your business forward. In fact, the business itself is at risk at every step of its development and growth. Innovation is not simply an option to grow, but a necessary part of a business’s success.
While playing it safe can help a business survive, you should not fear failure when it comes to taking risks. Strategically planning out the risk can help you evaluate alternative strategies to minimise the risks, or even decide whether the investment is worth taking the risk at all.
The best thing to do is prepare your business for all outcomes, this will help reduce anxiety and fear when making important decisions.
What you can do: According to Small Business, no micro-business owners, who responded to their survey, had a formal risk management plan. However, creating a risk management plan is a great way to protect your small business.
Start by brainstorming potential risks for your risk management plan, organising these from low to high impact. For each risk, try to plan appropriate ways to respond to the risk if it becomes an issue.
Consider assigning specific risks to team members to ensure that someone is always monitoring each issue, resolving them quickly and efficiently if needed. Giving your team the opportunity to provide input and watch out for potential issues together could minimise the chances of risks threatening your business.
Don’t try and do everything yourself
A small business owner may be willing to reduce costs by taking over multiple aspects of the business, however, trying to do everything yourself makes running a business much harder than it may seem. In fact, solo founders take 3.6 times longer to outgrow the startup phase. If you want to expand your business in the future, you might need to reach out to others for help.
What you can do: Whether it be hiring staff, interns, friends or advisors, any form of help will improve the chances of your business succeeding. If you are often out of the office and not always near your phone, consider taking on a virtual PA to answer calls and take messages, to ensure that you aren’t missing out on any business or important customer enquiries. Yes, delegating work might increase your expenses, however, it will allow you to spend your time focussing on more valuable aspects of your business goals.
Don’t work too many hours
Of course, starting a business takes up a huge amount of time. But one of the most common things for small business owners to do is work too much.
On average, small business owners work an average 45.5 hours per week, compared to the average 37.5 hour working week. Not giving your body enough time to relax and unwind can cause unnecessary stress to your body, which could lead to negative mental health issues. This would ultimately hinder your progress, as you would not be giving yourself enough time to re-energise to take on the challenges of running a business.
It’s important to enjoy the process rather than become fixated on success. A successful business owner will never be out of touch, but will allow themselves to take a break now and again.
What you can do: If you’re hesitant about taking time off, plan well in advance to keep your mind at ease. Alongside this, schedule your time off wisely e.g. when business times during the year are typically slow. Although business days can be unpredictable, you are giving yourself the opportunity to stress less while you’re away.
If you’re still concerned with taking time off, start with a day or two off and then build up from there.
Don’t obsess over your competition
While assessing the competition is important to make sure your business has its own unique selling point, their business shouldn’t be on your main agenda. Yes, check out their website now and again, take a look at what changes they’re making to the company. But that’s it. It’s valuable to understand where you stand against your competitors, but it shouldn’t affect the way you decide to run your business. If you focus on making the right choices for your company, then you shouldn’t even need to think about any competition.
What you can do: Keeping track of your competition can be debilitating, as soon as you start feeling threatened or intimidated, it is time to switch up the focus.
“Are you losing customers to competitors?” “Are you offering an alternative, more effective solution?”
These are effective questions you should be asking yourself, rather than distracting yourself and focussing on every other little detail of a competitor.
Don’t forget why you started your business in the first place
Your business venture was based on a passion. It’s important not to get carried away or frustrated with the day to day stresses of running a business. As a result, it becomes easy to forget why you started in the first place. Remember what motivated you? What was your purpose?
Although temporary sacrifices may need to be made now and again, keep in mind that you’re fulfilling a dream of yours right now. Take each day as it comes and remember that each day brings you one step closer to your business goals.Back to blog