Starting a small business is difficult because money depends on you for everything. The difference between success and failure can be a good line. A small mistake in the first two years, can hit a small business owner for six years while a new big customer can move you forward very quickly.
Small business owners need to deal with all aspects of the business from bookkeeping, marketing, innovation, distribution, finance and customers who refuse to pay. Larger companies have a different department for each of the above.
If you make a mistake in keeping your record, Inland Revenue comes knocking on your door. They work on the rule that you read all their tracts and do not include ignorance as a protection. What a lot of losers!
Lots of sleepless nights, arguments with bank executives, disputes with suppliers and angry customers can all lead to widespread depression.
And this is just the beginning, especially if you are in business with a friend! Make sure all agreements are in writing so that no disagreements about the agreement will continue. You better not go into business with a friend!
The first few years are very difficult, as many banks have a difficult process for lending to small businesses. Do not hesitate to change your bank or bank manager if you do not receive a sympathetic response. Not all banks are the same. Some even offer free banking for the first few years!
Having a good accountant, who will not start charging you the second time you call, can be very helpful. If you have a friend who is also an accountant, this can be very helpful. Don’t be afraid to change your accountant or attorney at first. Building the right relationship at the beginning is important.
Another problem young entrepreneurs face is unemployment. If one member of staff becomes ill, they can reduce all employees by 50%! It is a good idea to have someone you can count on as a backup. Another good idea is to take two timers instead of one job. Both can work as backups for each other.
It is important that you plan your growth. Obviously we would all like to see really good growth, but if the business grows too fast it can lead to disaster. In some cases you may have to return it until the cash flows allow for further development.
Consolidating your debts - where a financial company prepares you in advance 80% of all remaining invoices and does chase payments can really help here.
Never be afraid to change tracks if something doesn't work. If you are selling non-profit products - change direction. If you have a customer who takes a lot of time to make a small profit - throw it away. If you have a supplier that keeps you disappointed - get a new one. If you have a disgusting job - find someone else now before you spend too much time training the wrong person.
Be creative and always look for that special idea, development materials or something different to make your customers talk about you.
Once you have successfully run your own company and are used to making your own decisions, it can be very exciting and unlikely that you will ever work for someone else.
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