If you are thinking about starting a business, needless to say, you must be willing to work long hours the first couple of years until your business is in progress. But more than just hard work is needed to stay alive in business. When you run a small business there is a secret success formula that will improve your opportunities.
Your personal character, innate traits and daily attitude will allow you to succeed in business, with a healthy approach to each of those, it will be much harder than you expected to start your own business.
You need persistence, patience, commitment, passion and restraint and that’s even before you assess the skills that are necessary for the actual work!
Before you analyze the possibilities it pays to do some soul searching. Before starting your own business it’s recommended to know not only if your business idea sounds good but also if it’s right for you.
It’s a good idea to ask yourself some tough questions.
- Am I in business for the right reasons?
- I am confusing a business for a hobby or a status symbol?
- Am I passionate about the business?
- Are the responsibilities of the business likely to be in conflict with my lifestyle or family priorities?
- Do I have the necessary energy and determination to start a business from scratch?
- Do I have the ability to inspire my employees and be self-motivated?
- Am I ready to take a higher level of risk to reach my goals?
- Can I afford a possible decrease in income in the initial stages of starting my own business?
- Am I financially stable enough to have my own business?
- Will the business churn out enough profit to finance my lifestyle?
- Do I have the skills and confidence to start with the end goal in mind to execute a successful business plan?
- Am I able to manage all the day-to-day issues related to business?
- Once you’ve asked yourself these questions you might be thinking about what a successful business owner is? Accounting for slight variations in character a successful business owner is generally:
- Very good at what they do, already have strong skills and experience in the area they are pursuing in business and have an understanding of the skills they might need to develop.
- Able to identify a gap in the market and can identify an opportunity.
- Supported by family and friends
- Surrounded by a network of business people with experience
- An entrepreneurial spirit (enthusiast, determined, persistent, flexible)
- Willing to change their strategy, as the case may be when things don’t go to plan
- Able to convince anyone that this is a good idea
Be honest about your own ability, knowledge, and situation. If you really feel that the risk of starting a small business, and the work required is too much(your intuition will tell you) then deciding to stop is just as good as deciding to continue.
Your other option is, to plan out what specific barriers are stopping you and work on developing a personal success plan to push through the boundaries that you’ve now discovered
Unsure Where to Start in Your New Business?
If you read the last article and dropped us an e-mail we trust you were able to move closer to your goal.
There’s a brilliant children’s book by Dr Seuss called “Oh The Places You Can Go”. I have to admit I am a huge Dr Seuss fan, not only a forward thinker, he has a sense of humour, is a great poet and knows how to make even the most obscure issue fun.
I was first introduced to this particular book by a business colleague who’s 7-year-old daughter read to him at bedtime when she sensed a change in her dad who was at the time leaving a highly successful career to venture into his very own business.
The book itself is masterfully written about the possibilities we all have, the highs and lows we are sure to face and our ability to make it happen!
What’s fascinating is that no matter how many people I speak to they all understand that their results are an outcome of the work they are prepared put in (you see the people I generally attract know they are 100% responsible for their results). That being said it can’t be that they all aren’t prepared to work hard, do the long hours and stick at it.
What I’ve found instead is that most business owners have all the right intentions and are prepared to work hard only don’t know where to start or how to put their plans in place.
If your business was like planning a holiday then surely you would know a few plans need to be put in place in order for you to arrive at your ideal destination right!
Business is no different. In fact, it’s better than a holiday because you continually make changes that guarantee your experience will be a pleasant one. And if it isn’t, you have the power to make a change to ensure a different outcome.
Sure there are business plans you can put in place to help you stay on track but even then it comes down to taking action and if you don’t know what action to take well quite frankly your business will become stale fast.
Here are some simple steps to help get you on track in your business now!
1. Create a List – I know it seems an obvious point yet do you have one? And if you do are you looking at it daily and only doing what’s on the list?
If you’re not sure how to create a list simply put everything you think you need to get down on paper. It’s a good idea to keep personal errands separate as these should always be done out of your scheduled working time.
2. Group tasks together – once you have the list you sort it into areas that work for you. It might be small tasks, intermediate and big jobs. Most systems experts will recommend putting your tasks in the order of Marketing / Sales / Delivery and Administration.
3. Prioritize the list accordingly – I have to refer to Cover’s plan here of Urgent / Important/Non-Urgent / Non Important and the technique of placing a rating on each of the items on the list. The trick is once you’ve done that look for some quick wins to build momentum and focus on what will bring in $$. I hear about business owners spending hours on their paperwork and administration which should not be on the top of your list even if it is preparing invoices!
If the majority of your time is spent invoicing then it’s time to get a bookkeeper which brings me to the last point.
4. Delegate – Anything that you aren’t good at or that takes you more time than what you can act in an hour has to go. A mentor of mine would walk in and say if it took longer than 20 minutes you are wasting time delegate it. If I recall the office philosophy was Design – Delegate – Do. A final note to finish on, what do you need to do next?
“The 5 Reasons Start Up Business Fail in Their First 2 Years”
Do you want to be in the 20% of businesses that makes it through their first 2 years? If you are feeling a little uneasy and having a few doubts know this your future can be exactly what you want it to be. All you need is your Unique Advantage.
Are you interested then in knowing right now what the top 5 reasons are that stand in your way?
Imagine for a minute you are a baker, now everyone knows the ingredients to make bread right? If that was the case then why is it that some people can make the most delicious loaf that has grown to perfection and go on to master new and even more popular types of bread, and others stay safe stick to the original receipt and get left on the shelf?
It’s because most people are afraid of change and business is no different. We are more likely to go on creating a product that nobody wants than to define a speciality in the market take a risk and be known as an expert in their field.
Without the right ingredients like ongoing support, a clear direction and expert advice your money will soon dry up and you are less likely to have the courage to consider making the change you need to give your business a boost.
You didn’t know before today that there is help available especially for the solopreneur who is working from home with little or no contact to a group of entrepreneurial minds that can evolve your business.
Over the coming months, I will be sharing just how you can overcome the 5 killers of startup business
- Lack of Support
- Unsure Where to Start
- Trying to Do it All
- Cash Flow
- Afraid of Change
Why is a Business Plan Essential?
The business preparation supports the implementation of the collection of strategies, as part of the business. It illustrates how to reach the targeted goals of the group at a definite time so that all parties are aware of what is feasible, how to reach it in detail, and who has the accountability to bring the proposed plan to action.
Here’s what the business plan needs to consider.
- The process must be logical (to you)
- You need to build a support team (if you do it by yourself, you will burn)
- Significant issues should be noted
- It must direct all parties to do tasks that result in action
Objectives – What is a realistic goal and can it be reached in time according to your time line?
Use the SMART model for your goals because it’s a formula for success.
Specific – the tasks you highlight are specific and in line with the direction you want to take
Measurable – anything measured can be improved which means you need to set yourself some quantifiable measures.
Attractive – is the objective you’ve set interesting enough for you to stay committed to the cause?
Realistic – have you set a goal that is achievable based on the tools you have or are able to gain?
Timed – what are the deadlines you have set yourself?
Consider the indicators used to assess your progress, are they moving you towards the big picture?
Roles and responsibilities – Assign responsibilities based on who has the skills essential for every task you listed. Value your precious time, rather than trying to get a task done that you are not skilled at, look at your choices to connect with someone who can do it better and delegate.
Forecasts – Make sure you know your once a year projection so that you can work backwards. The statistics are significant because they allow you data to track your progress at all times. Here are some financial forecasts you will need,
Sources of revenue – How to make cash flow to remain in business?
Financial Strategies – What activities do you have to do or groups do you have to talk to for financing?
Estimates – List of expenditures. All expenses of running your business from the exact costs of services such as telephone and Internet to marketing and stationary. Do not overlook travel costs, fuel and membership to keep your development going.
Milestones – What are the activities that will mark your accomplishment and grant you all the reasons to stop and celebrate? You can pick out given dates, monetary statistics or launch new merchandise. Whatever works for you as a source of motivation?
Check your progress – Stay on track by giving yourself a little breathing space in your forecasted plan. This is a great way to welcome the little hiccups that can occur. Consider any reason that might hurt the completion of your work along the way, the cause and effect otherwise known as a potential risk and mitigate the threat with some plans for prevention.
Tips to consider down the road,
Prioritize vital areas such as marketing and sales.
Record the information to build the historical information that will help you to observe trends.
Keep your business plan as a fluid manuscript that allows you to add, edit and delete devoid of attachment to changes that are made.
What you focus on is what you get so be sure the business plan even if it’s a draft is designed as a reflection of what you believe in.
Your New Business Needs Cash flow
Safe to say most ‘new’ business owners are more concerned about getting their new idea off the ground than what their projected cash flow will be in 12 months. It’s no wonder that 80% of new businesses go bust in their first 2 years of trade.
The good news is you can avoid going backwards in business by a little forward planning at the beginning.
If you think of the 12‐month profit and loss projection as the centrepiece of your plan. This is where you put it all together in numbers and get an idea of what it will take to make a profit and be successful.
Your sales projections will come from a sales forecast in which you forecast sales, cost of goods sold, expenses, and profit month‐by‐month for one year. Trust me if you break down your monthly outgoings it will make the numbers crystal clear from day one. No hiding when you know upfront what you need to make to cover costs, and that’s even before you add a take-home salary.
I don’t mean to scare you so early in our relationship only it breaks my heart to see so many people going into starting a new business starry-eyed and blind to what needs to happen in the first 2 years to be living their dream.
Profit projections should be accompanied by a narrative explaining the major assumptions used to estimate company income and expenses.
Research Notes: Keep careful notes on your research and assumptions so that you can explain them later if necessary, and also so that you can go back to your sources when it’s time to revise your plan. Tracking your progress as you go will seem painful only it will mean you have valuable data to refer to when needed.
If the profit projection is the heart of your business plan, cash flow is the blood. Businesses fail because they cannot pay their bills. Every part of your business plan is important, but none of it means a thing if you run out of cash.
The point is to plan how much you need before startup, for preliminary expenses, operating expenses, and reserves. You should keep updating it and using it afterward. It will enable you to foresee shortages in time to do something about them—perhaps cut expenses, or perhaps negotiate a loan. But foremost, you shouldn’t be taken by surprise.
Be sure to consider everything you could possibly need from the small daily operational costs like postage and stationary to the larger one off capital expenses like equipment and office space.
For each item, determine when you actually expect to receive cash (for sales) or when you will actually have to write a cheque (for expense items).
Your cash flow will show you whether your working capital is adequate. Clearly, if your projected cash balance ever goes negative, you will need more start‐up capital. This plan will also predict just when and how much you will need to borrow.
Explain your major assumptions, especially those that make the cash flow differ from the Profit and Loss Projection. For example, if you make a sale in month one, when do you actually collect the cash?
- When you buy inventory or materials, do you pay in advance, upon delivery, or much later?
- How will this affect cash flow?
- Are some expenses payable in advance if so when and will you be offered a discount?
- Are there irregular expenses, such as quarterly tax payments, maintenance and repairs that should be budgeted?
- Loan payments, equipment purchases, and ownerʹs draws usually do not show on profit and loss statements but definitely do take cash out. Be sure to include them.
And of course, depreciation does not appear in the cash flow at all because you never write a cheque for it.
Tips from a wise man called Tony Gattari
- Always ask for extended credit mention you are “about to start a business can I have an extra 30 days.”
- Fear of cash flow means poverty – “It’s not what you make it’s what you keep!”
- Know your numbers . “Anything measured will improve, it has to you now have awareness it.”
- “Charge Early – Pay Late”
Information is not intended to replace advice and guidance from your accountant or financial adviser. It would be recommended to have you accounts check on a regular occasion by an industry professional.