While many people chase the dream of having a business of their own, the sad fact of reality is that nearly all businesses fail within their first 10 years. Even with the best intentions and a great team around you, that means chances are, your business will not last.
Unless you do everything right, that is.
While the failure statistics are surely eyebrow-raising, there are millions of businesses that have succeeded and continue to thrive throughout the country. You may think that they just got lucky, but, in reality, they avoided the pitfalls that many new businesses succumb to.
Control Your Cash Flow
Cash is the lifeblood of any business and if you want yours to survive, you need to take control of your cash flow from the start.
Make sure that all of your clients understand from the beginning exactly what your payment expectations are and that you collect your debts on time. As invoices become due, send reminders and let clients know the same day if the due date has passed. This will show them that you take your business seriously and that you do not accept late payments.
You can also offer discounts for early payments and to customers who routinely pay their debts on time. Do whatever you can to keep the cash flowing on time and you will put your business in a great position to succeed.
If cash is the lifeblood of a business, then debt is the poison that can kill it quickly. Sure, some debt is necessary for startup costs and other initial expenses, or for expansion, but a good overall rule of thumb is to avoid debt at all costs.
If you spend most of your cash repaying debts to creditors, there is little to no wiggle room left on your books to hire more employees, expand your customer base or keep up with your competition. You will quickly find yourself in more trouble than you can handle and may lose your company.
Keep accurate records and do not let your debt outweigh your income. If you do find yourself in spiraling debt, websites like DebtFreeOhio.com can help you solve the problem.
Avoid Leadership Breakdowns
The hardest thing for a business founder to come to grips with is that they may not be the best person to lead the company. The business may be your baby, but there may be one or two other people who know more about managing the day-to- day business that will help you succeed.
Do yourself a favor and surround yourself with people who know more that you.
This will help stave off leadership breakdowns, which can trickle down to the lowest levels of a company and ravage morale and profitability. If you put together a solid team — even if it’s one other person with knowledge — then you have a great chance to avoid leadership problems.
Don’t be another statistic. Start your business off in the right direction and beat those odds.
Joel Carey works as a financial analyst. He enjoys writing articles on this topic in his spare time, writing on newsworthy topics as well as topics to help the small, independent business owner.