Start-ups: avoiding six deadly mistakes in year one
There’s a high casualty rate among fledgling businesses in their very first year of operations. This blog identifies six mistakes that can sink a new firm in its early months and how to avoid them.
There’s a high casualty rate among fledgling businesses in their very first year of operations. This blog identifies six mistakes that can sink a new firm in its early months and how to avoid them.
Entrepreneurs deserve a huge amount of respect for taking the leap to start their own business venture as it’s no small feat. You just have to look at the troubling statistics which show 21% of small and medium businesses (SMBs) don’t make it past their first year to realise the challenge that’s set before them.
It’s evident that 2017 will be an unpredictable year for the UK economy, and following last month’s budget it’s vital now more than ever that a new business starts with as few issues as possible.
Here are six key ‘don’ts’ to ensure success in your first year.
You may have a small network, you may have never hired an employee, and you may have many family and friends happy to help out. This can lead to new business owners bringing in familiar faces to help get them off the ground – but while this is useful for some aspects of work like admin and delivery, external expertise are vital.
It’s not advisable to bring in family just because they’re accessible; instead take the time to recruit people who belong in a small business. The key traits to look out for are ambition and initiative, and an innate ability to work in teams. Alongside a specific skillset for different aspects of the business such as marketing, IT, sales and the like, it will help frame your company as a professional one.
The excitement of launching your own business is unparalleled, and naturally you’ll want to shout about it from the high heavens. However, before you go spending money on services claiming to boost the potential of your social media channels, you first need to create your own business identity. This includes creating your own brand values, distinguishing your unique selling point, identifying your tone, and keeping consistent messaging across all PR and marketing.
No matter how someone hears about your business, it needs to be in line with where they may hear about you elsewhere.
Just because you’ve become a business owner doesn’t mean it should become who you are. You need to remember to keep your personal life separate from business. We need to respect ‘burnout’ as a real phenomenon, it’s not something only the weak experience, it’s human to feel run down and demotivated from a lack of enjoyment in life, so take the time to focus on you.
A lot of this boils down to balancing work with play, and today’s technology makes accessibility to work a lot more possible. By using the cloud anywhere, you can cut commuting time and spend that time on extracurricular activities.
There are intelligent software tools that allow you to take your finances into your own hands. Online platforms can allow you to analyse your numbers, expenses, wages, POs/invoices and more. And while we believe this makes small business finance accessible and more easily digestible, nothing compares to the experience of an accountant. They’ll be able to monitor books for errors, use their knowledge to discover your eligible tax breaks, offer guidance and insight as a result of your numbers and more.
Yes, accounting tools are important, but using someone’s expertise will help those numbers go that much further.
Ambition is important, but your first year should be the time to get your ducks in a row. Setting specific and high targets can be demoralising if you don’t hit your highest hopes, which is why you should set bronze, silver and gold targets. This will allow for a feeling of success, but it will also encourage you to push yourself to strive for gold – be it sales, exposure, clientele – targets will always be beneficial in building motivation and momentum.
Recent findings from the Make or Break report issued by Xero shows that despite Brexit being a huge concern for UK firms, 58% won’t be seeking help from a mentor. It’s unclear why, perhaps it’s from a lack of access to industry peers, perhaps it’s a strong sense of self-belief, but either way mentors can bring huge benefits.
There is no shame in asking for advice, and most people will be happy to share their wisdom and experience. Don’t make a mistake that could have been easily advisable, hit the forums, attend networking events or even ask people in different industries – any knowledge you can soak up is vital to your future success.