Nobody likes to talk about failure, but any entrepreneur knows it’s the elephant in the room. Starting your own business is an inherently risky venture, but startups need to address those risks as aggressively as possible. Jared Hecht at Inc. and Rhonda Abrams for Gannett each have lists of seven things entrepreneurs needs to look out for. The lists read very differently, but we noticed two strong similarities:
First, have a plan. Or better yet, multiple plans. Startups need to make sure that contingencies are thought out in advance to give a maximum chance of success. Of course, the most important one is the businesses plan. It can be a time consuming process but is critical to ensure the company has needed focus and direction. Another important one is a marketing plan. As Mr. Hecht succinctly puts it, “no matter how great your idea might be, no one can buy your product if they don’t know it exists.” But this doesn’t just include advertising; the sales and customer services processes shouldn’t be done on the fly either. Another good one to have is a cash flow plan. Often, startups, especially service-based ones, struggle with cash flow despite having plenty of sales because clients are slow to pay but the business has not yet built up its cash reserves.
Second, always be willing to ask for help. Ms. Abrams strongly recommends that a startup never hesitate to seek legal advice: “Often, a few hundred dollars spent on a lawyer at the beginning of a business or an important deal can save you thousands of dollars and loads of headaches later on.” Both also note that one way or another, you need to be willing to listen to customers and other employees rather than relying solely on your own desires for your product or service. After all, it is the customer that has to like your offering enough to pay money for it.
Of course, we would add to these lists that it’s important to get professional help with your finances. Payroll, bookkeeping, tax compliance, and financial statement preparation are all areas that can distract a small business from its core purpose, so if you need help in any of these areas, give us a call and find out how we can help!