‘Hope springs eternal in the human breast.’ Alexander Pope knew a thing or two about the human spirit and the longing for what lies beyond the horizon. Every year that yearning inspires entrepreneurs from Ohio and every other state to start a business. Half of them fail within five years, but many of those failures are down to ignoring some basic rules.
You’ve heard it again and again, but that is because it really is the most important thing—write a business plan! There is plenty of online guidance available.
Your plan will define what you are offering, and where your market will be found. It will identify who your competitors are, and why your product is different. It will include an accurate assessment of the total costs of running the business. It will show where your funding will come from, and when you expect to be making a profit.
The plan will be your map for the journey. You need to check it regularly to be sure that you are where you are meant to be, and which route to take at each crossroads. It will also help you to spot alternatives when you find your planned route is blocked.
Theo Paphitis of the UK show Dragons’ Den says that unprofitability can kill a business slowly, but negative cashflow can kill it overnight. Especially in the early stages of your business, you need to manage cashflow carefully. If you can anticipate when there might be periods when more is going out than coming in, you can plan how you will deal with them.
The lazy approach is to wait and see, and borrow the money if you need to. That sort of borrowing is expensive and, unless you have already planned how you are going to pay it off, it quickly leads to a spiral of debt. That would be the time to call for expert help, preferably local. In Ohio you might contact a bankruptcy attorney in Dayton.
A successful business is a growing business. Not all entrepreneurs are good delegators, but it is a skill you need. Identify who are the dependable members of your team and learn to depend on them. Don’t neglect the weekly team meeting—as the business grows it will become crucial.
Alongside the skills of your own team you need to make proper use of expert advice. You may be good with figures, but building a solid relationship with a good accountant will be invaluable. They will spot issues developing in your accounts, and help avoid problems down the road. Having a lawyer on retainer is also a good investment.
Some people talk of the ‘triumph of hope over experience.’ You need an optimistic approach if you are going to survive as a business, because there will be anxious times. But hope alone is not enough, you also need good planning, good management, and good support. With these qualities there is every chance you can build a business to be proud of.
Spencer Osborne has worked for many years in the field of finances. He enjoys writing about money matters online via articles and in discussion forums in hopes of helping others.