Here’s a surprising thought. 2020 might be a brilliant time to start a business.
Why? Because you will be purchasing business essentials or infrastructure and there are loads of super cheap deals to be had out there. Thus your business will start off with a very low cost base. And while sales might be low straight away, they should be on a sharp upward trend, bar a second wave of the epidemic and lockdown.
If you can stay afloat now with your new business, it can become a real profit earner going forwards. This is particularly true if you would be selling to consumers, as many have been saving hugely in the past three months and paying down their debts. So they have a lot of money to spend.
Here are ten bits of advice to get your business up and running:
1. It took me a long time to understand this point. Negotiation is everything. There are no rules. Jettison all your thoughts about what is reasonable or proper in arranging any deal. You would be amazed what you can get away with and you don’t have to be kind to the other party. But nor do you want to be underhand – be tough but transparent.
2. Cash is really the fuel for any business. Understand where your cash is coming from and control your cash flow very carefully. Make sure you have the systems in place so that you can do this. This also means getting your invoices paid as soon as you can. Don’t be embarrassed to insist on prompt payment.
3.There are just three ways you can make more money from your business. You can cut costs, increase sales or raise your prices. Doing all three, even by tiny amounts, can radically increase your profit levels.
4. It’s a lot easier to sell to an existing customer than it is to find a new one. So make sure you look after your new customers as you acquire them and turn them into long-lasting, repeat-purchasing clients.
5. Producing a business plan helps you keep control of your business. Your plan doesn’t need to be very complex if your business idea is small-scale, but writing down what you are selling, how much you think you can sell and by when can help you run your business. Compare these budget figures to actual figures as they occur and understand why they differ. Adjust your business model.
6. Record, analyse, learn the lessons, adapt. Business people must be open and willing to accept they might have done something wrong. Don’t regard this process as negative. Look at this process positively and convince yourself that this will mean you are a step closer to getting it right! Don’t be indecisive. Get the facts, analyse, consult with others and then act with clarity.
7. Doggedness is a most attractive quality for an entrepreneur. There will always be setbacks and perseverance through them is important. Every time you beat one setback, you become more experienced. You learn to live with the stress and pressure and become cooler when difficulties emerge, thus making better decisions.
8. You can’t start a business without taking a risk, but try to avoid unnecessary risk. We are not all Tesla’s Elon Musk! I think a better role model for entrepreneurs is Amazon’s Jeff Bezos. There’s a business and an entrepreneur that I admire immensely.
9. You may make a loss in your first few months. So have enough cash to cover the initial period before your business breaks even, either by saving money before you start so that you can cover it yourself or by finding a backer or lender to support you.
10. Try to choose a market in which you have experience, for example, through your previous employment. And here’s a little-understood theme – your idea doesn’t have to be original or unique. You just have to carry it out more efficiently than others in your chosen sector or neighbourhood.
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