One in four UK adults say they are not inspired in their current roles and want to start their own business in 2016. But with the startling statistic that 50% of all small businesses will fail within the first five years, it’s a daunting prospect.
But done right start-up businesses can succeed. We’ve looked at the five golden rules for small business success, to help you avoid some of the common mistakes new businesses make in their first few years.
1. Prepare a realistic business plan
When starting out on your new business venture it’s all too easy to get caught up in the excitement of it all, not make time to create a business plan, only to come to a grinding halt a few months down the line. Taking some time out to put together a business plan will ensure you have a clear vision of what it is you’re doing, what you want to achieve and how you’re going to get there. A business plan doesn’t need to be a huge document, so long as it includes clear, actionable steps about how you intend to proceed and achieve your goals. At the very least your business plan should outline:
- Who your customers are – your target market
- What you’re selling – your services and/or products
- What people are willing to pay – your pricing policy
- How much cash you have and how long it’ll last
Once you have the initial plan in place reviewing and updating it every six to 12 months won’t be a huge task and will help to keep your business on track, and not join the 50% of failing start-ups.
2. Watch your competition
No matter how big, small or niche you think your business is there will be competition in one form or another in the marketplace. Ignoring what your competitors are doing can be extremely detrimental to your business, particularly in the early years. You don’t need to watch their every move, but check up on what they’re doing every few months to enable your business to compete. Identify how your business differs from your competition and use that to your advantage.
3. Don’t try to do everything yourself
There’s only so much you, as a business owner, can take on. We imagine the reason you started your business is because you’re passionate about the products or service you provide, not because you love running your accounts, negotiating legal matters or managing your marketing. Delegate, delegate, outsource. It’s not the easiest thing to do, but your business and your personal life will thank you for it. Seek help from the professionals when it comes to things you have no knowledge of, or that you don’t have time to involve yourself with, so that you can get back to focusing your time and energy where it should be – to running and building a successful business.
4. Seek professional advice
This goes hand-in-hand with our previous point. When you do decide to seek advice from the professionals make sure you are getting the best advice possible. This is not an area where you want to be cutting corners. Opting for the cheapest may mean compromising on the quality, when you really need the best advice you can get to ensure your business gets beyond the first fragile five years. When employing the help and advice of a professional, whether that be an accountant or a lawyer, ask to speak to other clients about their experience of their service before making your decision as to who to work with. Opting for the cheapest could end up costing you more in the long run.
Equally, be mindful of working with a larger firm that is servicing many big clients as you could miss out on developing the kind of close working relationships which are vital in helping small business owners succeed.
5. Get to grips with marketing
Leaving people to find your business by chance is unlikely to help you succeed in this day and age. Creating a solid marketing plan to run alongside your business plan will ensure you have measures in place to help you reach your business goals and achieve success in 2016.
At Approved Accounting we are more than just accountants to our clients. We work alongside our clients on their business plans and help with budget planning, as well as providing top level advice outside of day-to-day accounting. To find out more email Jon now.