Almost 600,000 new businesses were launched in 2017, according to the Centre for Entrepreneurs. There are, therefore, an awful lot of people taking their tentative first forays into the world of business – about 50,000 every single month.
Those early months can be tough going, with a lot to try to work out if you’re going to make a success of your operation.
So, what should you keep an eye on if you want to keep on track?
Have key goals and know how to track them
What will success look like for your business? It can be tough to know whether or not you are on track, especially when you haven’t got previous months or years to compare your performance to. That’s why it’s important to set small scale goals and re-evaluate your performance as you go. You might well find that you do better than expected. If so, this is clearly good news but it means you can recalibrate your goals appropriately. If things don’t well early on, don’t panic.
By setting smaller scale goals you can spot this as soon as possible and work out how to alter your course before a problem mushrooms into a crisis.
Manage growth carefully
It’s easy to get carried away if things go well – it is good news after all. However, expanding is tricky. It normally involves ordering greater levels of stock, moving into bigger premises and possibly taking on staff. People are an expensive investment and taking on too big a workforce can create a cost base that you might find tricky to maintain.
Taking on too big a challenge could stretch your business and resources too far. It might be better to do what you do well – and then gradually do it even bigger and better over time – than rush to do more and more before you’re ready.
Be prepared to be flexible
All the planning in the world can’t prepare you for the unpredictable nature of trading for real. You will inevitably find that some of your assumptions about your product/service or customer tastes weren’t quite right.
That’s only natural.
The key is to be able to react to this and make tweaks that can overcome this. This might mean altering your marketing messaging, amending your branding or altering the way your product is made or delivered to cut the costs and increase your profit margin. Do whatever it takes to succeed and don’t become overly wedded to your initial ideas.
Make sure you’re ‘in the know’
It’s important to be as clued up as possible when it comes to your finances. By using the right software, you can make managing your accounts much easier, with plenty of packages available that are tailored to the needs of startups. Find one that makes it simple to log your expenses, run key reports, prepare tax information and check your account details ‘on the go’ so that you can see a real-time picture wherever you are. It’s also important to keep your personal and business bank accounts separate to help with the management of this.
Invest profits wisely
Once the money comes in, you need to think about what you will do with it. In the early weeks and months you should be looking to re-invest your profits as you look to lay down firm business foundations. You might also want to save some of the money you make, building up a rainy day fund in case of emergencies.
Sluggish saving accounts, with poor interest rates, might not deliver the best returns for this however. If you want to make your money go further, therefore, you might wish to invest it. Doing so requires careful consideration – you don’t want to tie up your cash so that you can’t get at it or put too much money at risk – and a level of confidence and expertise to be able to do it properly.
If you are going to invest, be careful and do your research – even if you’re taking a riskier investing endeavor like security speculation trading; take a spread betting course, run a demo account, ask an expert, do some reading, whatever it takes to get it right.
With small scale goals, sensibly managed growth, flexibility, access to the full facts and a careful investment strategy, you can keep on top of your finances and focus on earning success for your start up.