Being an accountant, I see a lot of people coming to me in the later stages of a financial decline. Of course, while a good accountant can usually fix things that have gone wrong, it’s much easier and much less work to prevent things from going wrong in the first place by following financial best practises. If you are in the process of starting your own business, pay attention to the advice below and you might be able to keep your business free of financial disasters.
1. Launching an Untested Product
So many inventors and innovators have crashed and burned at the first hurdle for one simple reason. They invest heavily in an idea that they believed in, without checking to see if anybody else did as well. When first starting out, it can be difficult to gauge how people are going to react to your product as you won’t have the consumer base of a pre-established business, but that doesn’t mean you can’t find out what people think. Look at small focus groups, ask for feedback face-to-face or over the internet by targeting your product’s main audience. Invest time and money into product research, it may prove to be a dead end, but the amount of money you lose will be insignificant to the amount you could lost building and creating a product nobody wants.
2. Focusing On Making Money
I know this sounds like an entirely contradictory statement, but please, humour me. The most successful startups flourish not because they exist to make money, but because their founders have a passion for the product. To succeed in the business world you need dedication to a cause, if you are in business primarily to produce money, any signs of leaks or strain that could lead to unprofitability will lead to abandonment of the project. Instead, you need to find something to fight for. Computer giant Apple faced many problems on its road to success, yet is now one of the most valuable business in the world. If the main reason that you are going into business is purely for profit, then you are better off getting in on a business that has already hit its stride.
3. Spending Thousands On a Website
In the modern age, websites are a vital part of successful business. Obviously they need to look sleek and professional, but this doesn’t mean you have to pay through the nose to have one. Many services offer the opportunity to create professional looking websites from templates, complete with e-commerce and contact methods. In the early stages of your business this is all you need, and to spend extra in the early stages has the potential to end catastrophically, especially if product or business changes. Instead, invest enough to build a strong site from a template, but avoid bespoke, vastly expensive ones; for now at least. Once you begin to develop as a business comes the point in which you purchase an expensive website, not before you’ve even really begun.
4. Overspending On Conferences and Training
Extra knowledge of the business you are in, as well as networking and finding business opportunities, is an important part of growth, however, they are not vital. Startups often vastly overestimate the influence that these types of events can have on initial success, and invest heavily in exploring new avenues for their business without creating solid foundations. Consider these conferences and training courses a luxury for your business. If, after creating a stable infrastructure, such as solid market research, a tried and tested product or service, a base of operations and quality staff, you have the budgetary surplus to enable attending such events, then attend them. However, don’t put them above more vital needs of the business. They might improve your chances of growth, but they might do little for your chances of survival.
