Setting up your own business was never going to be easy. And now you’re right in the middle of doing it; it can seem like the problems never stop mounting.
It’s a steep learning curve, and one that any seasoned business person will look back on and be glad is over.
Nothing quite feels like that sinking feeling you get when you realise you’ve made a poor decision and lost a ton of money. The only consolation, if there is one, is that it is something that all entrepreneurs experience at one time or another. It’s almost impossible for a single mind to fathom all possible contingencies. However, there are a few common problems that afflict entrepreneurs far more regularly than they should. So what are they?
Not Having Enough Cash In The Bank
When entrepreneurs make their profit and loss predictions for the year ahead, they often fall into a simple trap. They calculate how much money they will have once all costs have been paid and all revenue received. Usually this is done over a period of a year.
However, there will be months and weeks throughout the year where costs exceed revenues. And when costs exceed revenues, you’ll have to dip into your bank account for the remainder. But entrepreneurs often rely on their sales to fill their bank account. So if there is no money in the account, there is no money to pay the bills, even if you expect strong revenue down the road.
This is a classic cash flow problem. The financial position of the company across the year looks good. But for some individual months it’s bad. Not having enough cash in the bank has been the undoing of far too many entrepreneurs. They would have been able to pay staff and rent if those payments were yearly. But those payments need to be made each month. And when they’re not paid, the business goes into crisis.
That’s why forecasting your cash flow, week-by-week, is so important. It means you can plan for those times when things will be tight. And it means you can work out whether you can afford various outgoings throughout the year.
Use The Right Products
Many small businesses have a “mom-and-pop” feel about them. And while this is cute, it doesn’t always seem totally professional.
Like any great film, businesses need the right props. They need to convince the world that they are a legitimate and professional outfit. Things like pavement signs with bespoke advertising or lockable poster frames from http://www.jansen-display.co.uk/.
These are a great addition. And they help your business stand shoulder-to-shoulder with the big boys. They add a certain gravitas and evoke a familiarity that customers will find reassuring. It tells them that you have an established business with excellent credentials. It’s a clear message that you have a capacity to market effectively.
Listen To Your Customers
It’s important to listen to your clients as a business owner. It’s vital, in fact, and nobody would disagree.
But many new entrepreneurs behave as if what their customers want doesn’t matter. That’s because they have a set idea in their minds about what it is that people do want. And that idea hold true, despite any evidence to the contrary.
That’s why it’s so important to gather feedback and criticise your services. Services like those at https://go.oracle.com measure what customers like, and what they don’t. Don’t become complacent by telling yourself that you have to run your business in a certain way because that’s the industry standard. If something isn’t working for your customers, change it.
Focus On The Customer
A related problem is the inability of some firms to focus on the client. Often businesses fall into the trap of believing that to sell their services, they have to talk about themselves. Startups can go on and on about their personal credentials and amazing clients.
While this is important, it’s not fundamental to marketing your business. What’s more important is showing that you empathise with the needs of your customer. You have to see the world from their point of view.
It’s the difference between saying “we offer the most experience of any professional consulting firm in the area.” And saying “you get the most experienced consulting practitioners in the area.”
Don’t Employ Your Mates
There are too many businesses that struggle from the outset because they are run by a group of friends. Usually, there is a great big barrier between personal and economic relationships. And this is because the two don’t tend to mix very well.
But some startups ignore this entirely. They think it’s cool to set up a business among friends. You’ll soon find, however, that this usually goes wrong. Either somebody doesn’t pull their weight, or they don’t turn up on time. Or worse still, they become impossible to work with.
Then you end up with an awful situation. You have to either say goodbye to your business or goodbye to your friend.
Remember, it’s always best to pick people who have the right skills and experience to do the job that you want done. There’s no point taking on people who don’t have the right skills. You can always pay back your mates later from all the money you make from your successful enterprise.
Get Rid Of Bad Employees As Soon As Possible
It’s worth talking about those times when you do make a mistake and employ someone who isn’t up to scratch. Often people underperform because they don’t actually like their work.
But that one person can prove to be very costly and disruptive. They can impact a whole team, reducing productivity and destroying morale.
Often simply asking someone if they’d like to leave is enough to provoke them to leave. But even if that softly-softly tactic doesn’t work, it’s still worth getting rid of people who don’t click. It’s a tough decision, but just think about how both your business and the jobs of all the people you employ are at risk. That should be motivating enough.