Common Reasons for Early Business Failure
- No website or inadequate social media presence.
- Lack of structured planning.
- Expanding too quickly - steady growth is the primary aim.
- Based in poorly-chosen location.
- Insufficient cash flow.
- Poor business management in key areas such as finance, selling, production, and HR.
- Starting the business for the wrong reasons.
Essential Survival Advice for Year 1 of Start-up
Physical & Psychological Factors
Set yourself a clear, quantifiable goal that you can define in a sentence. Without a clear goal, you won't know what you're working towards and you won't have the same motivation as if you had a succinct goal which makes success or failure easy to determine.
Don't be afraid to enlist help. Seeking the advice of others doesn't deprive you of having the final say. Other perspectives are good to have because, try as you might, you can't be a specialist in every facet of managing your business.
Believe in what you're doing. Even when others don't buy into your idea, or devalue it, you are unshakeable in your belief that your business idea is rock solid.
Don't shy away from taking risks. Obviously you can't be impetuous in your decision-making, but without banking on a few calculated gambles, your business won't make progress.
Stress is inevitable, so channel it into something positive. Think of stress or discomfort as a sign that you're operating outside your comfort zone and, therefore, your business is growing.
Try to maintain a balanced lifestyle. Managing a business is an extraordinary commitment, but it's vital that you take the time to eat properly, get adequate sleep, and work in some exercise. If you don't look after your body, it will negatively impact your mind and that will affect your ability to manage the business effectively.
Be prepared to spend less time with your family, but do not alienate them. Their support will matter so much when you encounter tough periods in managing the business.
Ensure that you have at least 1 year of saving in your bank account before starting your business. You will have numerous start-up costs and it's unlikely that you'll turn a profit in the company's first year.
If you are married or have an established partner, be honest with them in admitting that you may need to rely on their income for some time before the business gathers momentum.
Always keep sufficient capital at your disposal so that you can instantly pay for unforeseen expenses such as IT repair if technological problems arise (which they quite likely will).
Even if your business is generating income, make sure it's sufficient to cover personal expenses such as home utility bills.
Think very carefully about the form of business you decide to set up. If you're a sole trader with unlimited liability, your personal assets become vulnerable if the business struggles. If you're a corporation or limited liability, you would only stand to lose what the business loses.
Expert Advice for Entrepreneurs
Veronika Palovska - Brand Strategist
"In my opinion, one big change a year is more than enough. It takes some time for people to get used to your brand and start recognizing you. If you're just getting started, I'd recommend keeping things as simple as possible because the changes are inevitable."
Lillian Vernon - Entrepreneur
"Learn how to read balance sheets and income statements. You may have an accountant that can calculate figures and keep your records intact, but you must be able to interpret them so you can respond appropriately and make decisions effectively."
Colette Cassidy is the Director of an Irish tax consultancy company named All Finance Tax, specialists in financial and
taxation advice. She's an expert at creating engaging, business-related content for her audience.