Business Failure

Topic: Business Failure



Keep overheads low – This
is one of the most
important rules to follow
for most small businesses.
Unless you are a Silicon
Valley start-up, with
masses of funding, money
will be tight at first. Most entrepreneurs put
their life on the line here -investing in
themselves, by using credit cards, or their
homes as surety.
Remember the statistics we looked at about
business failure? Many of them fail because
of lack of funding. Keep your overheads
tight and protect your cash flow.
Staff or contractors
It is likely that at some point you may need
assistance in the business. There are many
pros and cons to employing staff. This will
very much depend on the type of business
that you have. A rapidly increasing trend is
to take people on as subcontractors rather
than staff. This merits a section of its own,
so I will revisit it later in this module.
Suffice to say for now, I would avoid taking
on staff in the very early stages, until you
have established the business a little. This is
for a number of reasons, the most
significant of which is keeping the overhead
as low as possible.
Don’t open an office
Not for vanity anyway. You can probably
work from home to begin with. Even
Microsoft started in Bill Gates garage.
Protect IP
Don’t forget to think about protecting the
Intellectual Property in your business. This
is a topic in its own right too, but briefly
you need to know how to protect your idea,
whether it’s an invention or a brand name.
You need to know about patents,
trademarks, copyright and registered
designs.
You can find out a lot about this online, and
that can save you a lot of money.
Networking
This is a very effective way of supporting a
new business, word of mouth referral is
very important. There are other advantages
as well. A strong network can offer you
mentoring, formally or informally, allowing
you to get a lot of advice from other
members. More about this later.
Choose your business name
carefully
It needs to describe your company in a few
words, be easy to remember, easy to
pronounce and easy to spell. Its good if it is
also witty and catchy. You need to find a
suitable available web domain name. You
must check there are not any similar
business names and similar domain names
Don’t go on a business course
run by a talker.
Follow a doer. Someone who has a
successful track record.
Book learning and theory are one thing,
doing it is another. So, while it is a great idea to read lots of business books to ensure you grow your knowledge, sometimes you just need a little very simple low level advice from someone who has been there and done that.
Keep an eagle eye on your competition knowing what your competitors are up to can be the key to keeping your business alive.
You must understand and experience firsthand their products and services, and know what value added benefits they are providing their customers. Your objective is to grow your business by taking away their customers.
You need to understand your customer and what your product or service can do for them, what owning your product will give them.
Think about what is in it for your customers long term, not what profit you can make out of them short term.