Launching a small business may involve some risk, but with an awareness of the most common challenges, you will have the potential to be a great success. Follow our six tips for new business owners:
1. Do market research
Lack of proper market research is one of the key problems for new businesses. Research and planning are vital to ensure that your business idea is viable and that your pricing is both competitive in your market place and provides an adequate return.
2. Secure finance
Having sufficient capital is essential for the survival and prosperity of your business, and is a primary indicator of your business' health. It is important to create a high-quality business plan to attract and secure funding that you will need to make your business successful. It is also important to have a plan in place to deal with any unexpected costs or problems.
3. Be realistic
During the start-up phase, it can be easy to make over-optimistic forecasts. Common issues include inaccurate forecasting of market size, focusing on sales volume rather than profit and exploring new markets too soon. You must ensure that you have researched your business’ potential and have realistic projections for the future.
4. Choose suppliers carefully and perform customer credit checks
Many new businesses set up unsatisfactory credit arrangements and do not take care when choosing their suppliers. It is important to carry out credit checks on new and existing customers and to find reliable and competitively priced suppliers.
5. Manage stock control
Spending too much money on unnecessary stock can damage the cashflow of your business. You need to put systems in place to keep track of all stock levels and values – this will allow you to free up cash as well as having the right amount of stock on hand.
6. Hire the right people
Employing relatives and friends may appear an easy solution to staffing issues, but they may not have the right mix of skills that you need. Taking on people will always mean some form of investment for your business and requires careful consideration. Always hire people with the skills required to help your business succeed.
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