For lots of entrepreneurs, starting a business is a time of many mixed feelings! Of course, there are the positives. It’s very exciting to start a brand new venture and see something that you’ve worked so hard on come to life. And, there’s the freedom of not being tied down by working for someone else. However, doubt also often creeps in. What if my business isn’t a success? How can I do my best to prevent it from failing? We all hear the statistics about how many new businesses never make it past the first few years. This can be a very daunting thought, especially as lots of time, money, and effort goes into starting a company. But, there are things you can do as a new business owner to prevent this from becoming a reality for you and your operation as much as possible. Here at Chrysalis Partners South, I have spent a lot of time on business owner coaching. I’ve worked with lots of small business owners to strengthen and grow their operations, ranging from brand new startups to well-established firms. So, I know what makes them tick, and what gives new businesses the greatest chance of success at the beginning. In this blog post, I’ll be sharing tips to prevent your business from early failure and give it the best start possible to ensure a long and prosperous life for your company! From ensuring you have a good business plan in place to keeping a watchful eye on your cash flow, these six tips are the foundations for a business that can weather early storms and come out the other side stronger and ready to thrive.
So, how can you help prevent your business from early failure?
Businesses, both new and established, fail for any number of reasons. After all, running a company that makes a sustainable profit can be tough. But, there are some key mistakes that many new entrepreneurs make. Try and avoid them using these tips that I’ve learned from my time in business owner coaching:
A business plan will be your best friend
I think that the number one reason why new businesses fail early on is because of their business plan (or lack thereof!). Having a strong, solid plan is the best way to give you a clear path ahead. A good business plan will contain strategies for your marketing, sales, and how you will generate revenue overall, as well as secondary ‘back-up plans’ in case something doesn’t go quite the way you had hoped. Many new business owners make the mistake of either not having a plan at all, having one that is too vague and therefore not helpful, or crafting a plan that is not sustainable to follow in the long term. The goals and strategies that your plan sets out should be motivating but realistic. For example, it’s unlikely that you will grow sales to a million pounds in the first year. Instead, look for more sustainable plans such as growing sales by 25% compared to the last quarter of the year, and so on. From my time in business owner coaching, I have seen first-hand the huge positive impact that a great business plan can have on an organisation. So, if you do just one thing to help prevent early business failure, make it this one!
Keep an eye on your competitors
Knowing what your competitors are up to is very important!
Everyone has competitors for their business, no matter how niche your operation may be! Perhaps your competitors have been around for longer than you, and are more successful on the surface. Or, they may be struggling to keep up. No matter what your competitors are up to, it’s absolutely vital that you keep an eye on what they’re doing on a regular basis! Healthy competition should be seen as a good opportunity to learn more about the industry you’re in, and maybe even pick up new strategies and ideas that you could introduce into your own business. After all, if you copy the methods of your most successful competitor, and put your own unique spin on things, you are more likely to make your business a success than if you were to completely ignore what your competitors are up to, good or bad. And, if you see that your competitors are struggling, what do you think they are doing wrong? Then, you know not to replicate this for yourself.
Know your brand
While it is very important to know what your competitors are doing, it’s also vital to know your own brand very well. After all, if you’re just a carbon copy of what’s already out there, your business probably won’t do too well. Ask yourself these questions regularly: What makes my operation different from the rest? What are the core values and how are these being portrayed to the customers? How is the business being marketed and what could be done to improve this? These are just a few questions that should be helpful in getting to know your business on a deeper level. Through my business owner coaching, I have seen new entrepreneurs fall foul of not knowing their business well enough. From the very beginning, you need to have a solid understanding of what you’re doing and how you stand out from the crowd. You can then build upon this foundation to market your business and attract new customers, which should get you well on your way to a solid business that isn’t destined for early failure.
Prioritise customer service
Your business would, quite frankly, be nothing without your customers. So, they should be your number one priority. During my time in business owner coaching, I have seen more than one organisation that hasn’t prioritised its customers enough. Whether it’s taking too long to respond to queries, not offering incentives for customers to come back, or simply not solving the issues that customers may have, poor customer service is a sure-fire way to give your business a bad name. After all, customers talk to their friends and family, and word-of-mouth recommendations are a great way to get new business. So, you want to make sure that the things your customers are saying about you are positive! And, if you provide a service that goes above and beyond, your existing customers are far more likely to come back to you, therefore generating that all-important repeat revenue. This is also a cheaper method of increasing your profits compared to constantly advertising for new customers.
Avoid getting into debt wherever possible
There’s no denying it: starting a business is expensive! It’s normal for an entrepreneur to have to take out a loan of some kind in order to have the funds available to start their company. But, I know from business owner coaching that problems can start to arise when lots of high-interest debt is taken out. When the time comes to repay it, you don’t want to be stuck using all of your available cash flow to pay your debts back. This means that there’s less money to spend on expanding the business, so it can get stuck in a vicious cycle of taking out debt, using all available money to pay it off, and then having to take out even more debt to secure the funds to expand the business! Ultimately, this is just setting a business up for failure. So, as a new business owner, try and avoid debt as much as possible. This is, of course, easier said than done. But, it tends to be better to have a company that grows more slowly but is debt-free than one that starts with a bang but then struggles to keep up with debt repayments.
Don’t leave your cash flow unchecked!
A healthy cash flow is important to any business
Speaking of cash flow, it’s important for any business owners to keep an eye on it. But, this is especially true for entrepreneurs who are new to the game. It’s important to maintain the balance between cash coming in and cash being spent as much as possible. After all, if you’re regularly spending far more than you have coming in, your business is destined to run out of money sooner rather than later. The overall aim is to limit expenses, while at the same time doing as much as you can to bring in more revenue. This will set any business up for a strong financial future. But how can you do it? I know that it is easier said than done to limit spending, especially when a company is new. It seems as though there is always something that needs money spending on it! So, my advice is to check in with your cash flow on a very regular basis- daily if possible. This will give you a firm idea of what cash is available and what’s being spent, so you can look into ways to improve it if needed, before it gets out of control.
Final thoughts: can business owner coaching help?
If you want to ensure that you’re building an operation that is solid and ready to weather the storms that inevitably come with owning a company, then you would do well to follow the tips set out above. However, I know that this is often easier said than done, especially if you are new to owning and running a business. But, there is one secret to ensuring that your organisation has the best chance of success right from the start: coaching. A good business coach will be well versed in working with new operations to give them the best start and the lowest chance of early failure. They will work with you and your business to come up with a solid business plan and other ways to keep your business thriving and meeting its goals. Of course, business coaching is an investment, but choose your coach wisely and it is one that should certainly pay off!
Here at Chrysalis Partners South, I love to see my clients and their businesses thriving. I do this by using my experience in business owner coaching to work with them to increase their sales, revenue, and work towards any other goal they may have! I know that the bottom line for most business owners is that they want to make more money, and I help to make that a reality. If that sounds like the sort of coach you would like to work with, then please get in touch today on email@example.com.