Being self-employed is a dream for many. The advantages are attractive: the opportunity to turn your passion into a living; the flexibility of being able to choose your working hours, and the simple fact that you are your own boss.
However, the realities of self-employment are often far removed from these ideals, particularly for start-up business owners. The flexibility and sense of fulfilment often associated with self-employment is hard-earned. New business owners often work long, unsociable hours, and persevere through crippling knock-backs and financial discomfort. A 2014 study suggested that more than half of new UK businesses don’t survive beyond five years. It is therefore vital to take measures to ensure your business has the best possible chance of surviving – and thriving – in the long term.
Expect the Best; Plan for the Worst
Successful business people tend to have an abundance of resilience and positivity Both are fundamental to achieving the potential long-term rewards of self-employment. However, unless tempered with a healthy measure of prudence, the ‘positive-at-all-costs’ approach could lead to a business disaster. Therefore, as you begin to make your first steps into self-employment, it is wise to consider the potential pitfalls in your business’ journey towards success. Although it may not be easy to think about your business going through future difficulties, taking the time to ensure adequate safety nets are in place is vital to its long term success.
Three Start-Up Pitfalls
Here are three major business pitfalls and how to avoid them.
1. Lacking Adequate Financial Reserves
It may be tempting to throw all of your money into your new business to give it a kick-start. However, it is essential to ensure you have a reasonable cash-reserve set-aside for testing financial times. Although this may mean you have to moderate your business development plans for a time, this prudential move will pay dividends when your business is in need of a financial lifeline in the future.
2. Being Ill-Prepared for a Surge in Demand
There may be times when circumstances lead to an overwhelming demand for one of your business’ products or services. It is essential to consider how you would successfully manage this situation as a start-up business. Repeat custom and word-of-mouth recommendations are vital to the success of new businesses Letting down customers when you are trying to build up your reputation is unforgivable, and could be damaging to your brand. It is essential to have a plan in place and reliable contacts to call upon in the event of a surge in demand.
3. Accidents Happen!
The harsh reality is that no matter how many hours you work, or how successful your business is, all of your graft can be undone in a heartbeat. For example, if an accident occurs on your business’ property, or as a result of your business’ operations, the financial repercussions can be devastating. However, with public liability insurance your business can be protected for such an event. The added bonus? Further peace of mind for you. You should also consider other areas where your business may require cover.