By Imogen Clarke
Setting up a business requires significant investment, so you must focus on making your startup a long-term success. Sadly, statistics show that a massive 60% of new businesses fail in the first three years. This can be due to multiple factors including poor business planning or issues with cash flow. Fortunately, there are plenty of simple ways to prepare for potential business challenges. Here are actionable steps you can take to overcome hurdles in your small business.
Create a solid business plan
Failing to create a detailed business plan is one of the top reasons why new businesses fail. A business plan is a vital strategic tool that will guide you from the startup stage through to expansion. It will also help you make well-informed business decisions that are critical to the growth and success of your company. You should also keep in mind that your business plan will be used to attract investors and demonstrate to lenders why they should support your startup. With that in mind, you must take the time to write a solid business plan before launching your business. There is a good selection of articles offering guides and detailed advice on how to write an effective business plan.
Adopt good financial habits
Figures suggest that around 80-90% of small businesses fail because of cash flow issues. Poor cash flow can have disastrous consequences on your business and make it impossible to grow and increase your bottom line. With that in mind, it is vitally important that entrepreneurs learn good financial habits and have a good understanding of cash flow. Broadly speaking, if your expenses exceed your incomings, then you have a cash flow issue.
Remember that even large, profitable companies experience issues with cash flow, i.e., if they have debts due before they’ve collected enough money from sales to cover their bill payments. Fortunately, there are plenty of actionable steps you can take if you’re faced with this problem. Firstly, conduct customer credit checks and encourage customers to make payments on time by sending invoices immediately, setting clear payment terms, and sending regular payment reminders. Identifying ways to lower your overheads is another simple way to improve your cash flow. For example, move to a more affordable commercial property or negotiate lower prices with your suppliers.
Make recruitment a priority
The current job market swings in the favor of candidates, and there is fierce competition amongst businesses to attract top talent. Your employees have the power to make or break your business, so you must make recruitment a top priority. Smart business owners invest heavily in their recruitment strategies and focus on attracting and retaining highly skilled staff. This benefit is that you can effectively target the correct type of employees for your company faster. Using a niche agency such as ProLink Staffing for healthcare vacancies can ensure you get only the best applicants for your job roles. If you are struggling to hire, then consider ways to make your company more attractive to prospective employees. For instance, offer job perks such as a high base salary, free private healthcare, and annual bonuses. You should also write detailed job advertisements that clearly outline your workplace conditions and values.
Focus on your brand image
Your brand image will play a key role in the success and profitability of your company. Establishing a strong brand is essential if you want to gain a competitive edge in the modern business world. Keep in mind that poor feedback travels fast in the digital age, especially via social media platforms. Even just a few negative reviews can damage your company’s image and discourage potential customers. For that reason, you must focus on building your credibility and take steps to protect your brand image. One of the easiest ways to become an authority in your industry is by creating a strong advertising and marketing strategy. Make an effort to connect with your intended customers online and build meaningful relationships.
Posting relevant, high-quality content will also help you develop trust and creditability with your audience. Investing in content management software (CMS) will help you streamline your marketing activities and maximize the results of your advertising campaigns. According to software experts at Helastel, you should consider the following things when choosing a CMS for your business: “budget, functionality, and support.” Consider the different options carefully and choose a system that will suit your business requirements now and in the future.
Summary
When you start a business, you will likely face challenges that will threaten the success and profitability of your company. Failing to take the right action could have severe consequences and may even result in your company being forced to close. As an entrepreneur, you must prepare for these challenges and have a plan in place to help you overcome potential hurdles. Use the above steps to help you overcome common hurdles and achieve your strategic business goals.
Sources
‘60% of New Businesses Fail in the First 3 Years: Here’s Why’, Durham City Incubator, https://dcincubator.co.uk/blog/60-of-new-businesses-fail-in-the-first-3-years-heres-why
‘7 Steps to a Perfectly Written Business Plan’, Entrepreneur, https://www.entrepreneur.com/article/281416
‘Business Failure Rates’, Simply Business, https://www.simplybusiness.co.uk/knowledge/articles/2015/08/business-fail/#:~:text=The%20cash%20flow%20killer,because%20of%20bad%20cash%20flow.
Homepage, Helastel, https://www.helastel.com/
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Imogen Clarke is a freelance writer who specializes in entrepreneurs and small businesses. When she is not reading or writing, she can usually be found enjoying the outdoors with her dog, Charlie.
