Starting a new business is nothing new. Millions of entrepreneurs take their ideas and build a business. The hard part is making the business work. Unfortunately, the majority of small businesses fail in the first year. Cashflow is the biggest killer, but it is not the only one, so if you have plans to start a business, here are some tips to ensure you keep your startup afloat.
Keeping Costs Low
Keeping costs low is vital. The more you spend, the more at risk you are of running into cashflow problems, which can be catastrophic for a new business. Lean business strategies are nothing new. The Six Sigma training model is based around this concept and has proven to be very successful.
To begin with, spend as little as possible. Get into the habit of justifying every cent you spend. That way you are less likely to blow your budget on unnecessary expenditure. Keeping costs low will give you time to build the business and attract a client base. The money you save can be spent on growing the business.
If the cash dries up, you cannot pay suppliers or service your debts. You also can’t pay your staff, so it won’t be long before the business fails. Keep a very close eye on your cash flow and produce cash flow forecasts regularly. Always make sure you have some cash in reserve, to cover any unexpected expenditure.
Networking is Key
Networking is vital for startups. The contacts you make in the early days will allow you to draw upon a wide variety of different experiences. Attend networking events and make a point of connecting with people who have more industry experience than you do. Ask them to mentor you so you can learn from their successes and failures. If you are passionate about what you do, they will want to help you.
Innovative Marketing Techniques
Don’t be afraid to try new things when you start marketing your business. Attend trade shows and make contacts. Try to do as much for free as possible, and don’t forget to harness the power of social media. It is free to connect with people on Twitter, Facebook and LinkedIn, so start building your brand.
Concentrate on Providing Great Customer Service
Word of mouth advertising is very important for new businesses. Much of your business will come via repeat clients, so concentrate on providing excellent customer service. This enables your business to grow organically, and at a rate that you can sustain.
Invest in Good Staff
To grow a successful company, you need the right people on board. Look for employees who are flexible and multi-talented. This is especially important in the early days, when you need people to wear a multitude of different hats. The more flexible people are, the more they can add to the business.
Getting a business off the ground and building it into a successful venture is never easy, but with the right support mechanisms in place it can be done.