BIG BAD BUSINESS FAUX PAS TO STEER CLEAR OF If you have an entrepreneurial spirit and you’re ready to hit it big time, you know you’re about to make a big decision. Possibly one of the biggest of your life, akin to that of deciding to get married or have a baby. Going ahead with your plans can leave you feeling somewhat overwhelmed and to be fair, there’s no real way of knowing how you’re going to cope. The majority of entrepreneurs spend their days chasing success but there are inevitable pitfalls along the way. It’s going to be a bumpy road. While this is definitely something you’ve heard before, knowing how you’re going to handle the wins and the losses is something no one can predict. The thing is, when you head out on your own, you have little to no safety net. Yes, most entrepreneurs start off with some kind of financial backing. Sometimes this is their own hard-earned money that has been saved and sometimes they’ve managed to acquire funding through an investor to start their project. Now, having a heap of cash available as a once-off to start the business might sound great but unless the money is used wisely, it won’t necessarily help more than just covering your start up costs. You need to be able to cover your costs but also, in order to grow the business, you need to be able to set up financing. This means you need to not only make the business a success but also maintain an excellent credit history. Most businesses, whether a fledgling or a middleweight player in the industry, need to have a good relationship with the bank. Borrowing capital to grow the business is a regular occurrence in the lives of most business owners. But you have to prove your financial worth and you need something to leverage against the loan. This is the idea of asset finance solutions. Your company must be able to pledge a security interest in assets to secure funding. Many young entrepreneurs find that these are the kinds of things they haven’t paid enough attention to and they rely on acquiring private investments. But, you need to make sure your business can have access to money from anywhere, when necessary. Not keeping your books in good order is an enormous business faux pas As a new business owner, you must keep your accounts in order. You need a proper bookkeeping system which is accurate at all times. When your business is in start up phase, it can seem like an unnecessary expense to employ a bookkeeper or outsource your finances to a financial advisor. However, keeping up with the books yourself can become too much and if inaccuracies occur, just due to human error, then you could end up in hot water. There’s nothing worse than having an opportunity to acquire investment but ending up with accounts that the investors cannot understand. So the solution is fairly simple. You must automate your bookkeeping. There are a number of bookkeeping software solutions available. Many are designed to scale with your business. They are modular and you purchase what you need and when you need it. By having this system automated, you don’t run the risk of human error and your books will always be in order when approaching an investor or the bank. You need to hire when you need to hire You’re a one-man show but you are unlikely to ever be a one-man success story. The greatest entrepreneurs of all time are backed by a bunch of people who have come on board to make the company a success. In the beginning you’re going to be self-absorbed, you’re going to be wrapped up in making all the decisions all of the time. But once you’ve launched and acquired some customers and you’re just about ready to take the next step, you need to hire some people. Many entrepreneurs feel that they can do it all alone but it’s the worst thought process to have. In fact, this is what will ruin your business. Because you need a team. You need to have people to assist and if you pay them fairly and you treat them properly, you could end up with some loyal staff members who are an asset to your business. Don’t get stuck in an untrusting space and take it all on alone. The only way to focus on new business development is by delegating work to employees. Holding onto money too tightly There is a large community of entrepreneurs who have taken to the idea of bootstrapping. This means that money is only spent when money is available. They operate off their profits alone. This makes a lot of sense in the beginning. In the startup phase, you can keep the business feeding itself. However, when you acquire more customers and when you find yourself wanting to network with more people and seek out more opportunities, you need to have a presentable entity to offer. You will eventually want premises, perhaps some new state-of-the-art technology or the like and your profits won’t necessarily cover all of these costs. What’s more, you need to spend money on security and protecting your business with the likes of online security and business insurance. Without these two particular things you could find yourself in financial ruin before you know it and all because you were too scared to spend cash. Becoming a business owner is not easy. But if you educate yourself and pay attention to the lessons learned and shared from your predecessors, you’ll stand in good stead to have a successful company. Leave a Reply Cancel ReplyYou must be logged in to post a comment.