Have you decided that 2019 will be the year you finally go into business for yourself? Is this the year in which you finally shrug off the oppressive corporate yoke which has dampened your dreams and stunted your growth for too long? That’s awesome! Entrepreneurship is a noble endeavour.
Small businesses benefit your community and your local economy. What’s more, they serve as a reminder to all those with aspirations of owning a business that even in the corporate-dominated world of modern enterprise, there’s still plenty of room for the little guy.
We’d wish you luck, but luck isn’t all you’ll need! You’ll also need a lot of hard work and diligence. You’ll need to be able to learn from your mistakes fast and keep an ever watchful eye out for the risks which have brought many a business like yours to its knees. Risks such as...
Borrowing more than you need
Chasing funding for your start-up can be a soul destroying journey. But there’s nothing like the feeling of adulation when a lender gives you the nod. Just be wary! Borrowing more than you need may seem like a savvy move but it will lead to higher monthly repayments which in turn can hamper your cash flow (more on that later).
This is why it’s essential to calculate your start-up costs far in advance, getting accurate quotes from vendors, suppliers, shopfitters etc. It’s also important to fully calculate your cash flow projections for at least your first year.
In the digital era, the same opportunities available to you are also available to like-minded individuals who have their eyes on the same gap in the market as you. To stay afloat you’ll need to do all that you can to position yourself above the competition.
Take steps to boost your SEO rankings for your chosen market (i.e. local, national and international- all 3 are slightly different beasts in SEO terms). Build value in your brand through content marketing.
This will give your brand a voice and a sense of personality. In turn this will help your customers to make a personal connection to your business. Which brings us to...
The success of your brand will depend on your ability to retain a consistent base of existing customers while also attracting a steady stream of new business. This is a balancing act that many SMEs struggle with.
One of the most potent ways to achieve it is to take a page from the Uber manual and incentivise customers to introduce friends, colleagues and family members to your business. It’s also a good idea to offer customers a rewards scheme which gives them more of what matters to them with flexible options to drive loyalty.
Impeded cash flow
Unless you keep an eye on your overheads and invest in areas that have a healthy ROI you run the risk of impeding your cash flow and running out of money. When this happens vendors don’t get paid, employees don’t get their wages and debts go into arrears.
Make sure that your cash flow stays healthy by maintaining good relationships with your vendors so that they will be flexible when you need it. Prioritise your spending and don’t be afraid to take a hit on your profits by throwing a sale if it liquidates some of the assets that you have sitting gathering dust in your inventory.
Steer clear of these most common risks and you’ll be primed for small business success!