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Starting and Staying in business
01/07/2009
Preparation and planning and people – the keys to successfully starting and, more importantly, staying in business. Having a bright idea, a “eureka moment”, is all very well, but do you have the ability to turn it into a profitable business? Too often we meet business owners who have had exactly that problem – the idea was a great one, but they lacked either sufficient capital or sufficient expertise in one or more critical business management disciplines to be able to turn that idea into a successful business. It must be said also that on some occasions what was thought to be a good idea, proved not to be so.
Our first piece of advice would be that, if you have what you think is a bright idea, the first thing to do is sleep on it over night! If it still seems to be a good idea in the morning then seek some professional advice on what to do about it, especially if you have never run your own business before. A good starting point is your local Chamber of Commerce or BusinessLink. Their staff are highly professional and they have the contacts to provide introductions to a broad range of advisors, mentors and trainers. They can also provide information on any local grants or business loans etc that may be available. It’s also worth having a chat with us at Business Finance Services Ltd. If we cannot help you with specialist aspects of your business, then we will almost certainly know someone who can.
Next comes the planning stage. Is there truly a market? If so how does one get the new business established in it? Anyone can write a 3-year plan, but can they write a realistic plan? In doing a cash flow or P&L forecast it’s easy to put in the figures you would like to achieve, but are they really achievable or are they simply wishful thinking? Here again it is important to get suitable advice and guidance, or at least a second opinion (just make sure it an experienced opinion).
Another area where mistakes are all too frequently made is in the choice of business partners &/or staff. Choose your business partner because their skills and expertise compliment your own, not because you have been chums for a long time. Failing businesses are a great way to loose old friends. The same goes for staff. Make sure that they will be mentally strong enough to withstand the trials and tribulations that often arise with the establishment of a start-up business. They will also be entitled to the right levels of support and training to do their job. All of this costs, and these costs must be built into the business plan.
Probably the most common cause of failures of SME’s is that their owners/managers greatly underestimate the costs of start-up and the time it takes to generate profitable revenue-flow. Whilst it is always sensible to talk to the Bank first, in the present economic climate their response is often negative unless the business or its directors have oodles of additional security to offer. That’s why it is always a good idea to speak to us at Business Finance Services Ltd. One subject that we specialise in is helping SME’s to find suitable sources of finance. Whether you are looking to start a business or you have one that is in financial difficulties, call us on 0800 093 5240 and let us help. Whether it is asset finance, capital for growth or investment for recovery we have the contacts. We also work closely with a local team of lawyers, accountants, marketeers and Insolvency Practitioners. If you need a new shareholders agreement or a good business plan or a CVA to protect the business from its creditors we will work with that team to provide the services you need.
Submitted by Sarah Crennell