The survival of a business within the first five to ten years of existence is a huge challenge. Running a business on a slim budget, competing with bigger companies, and managing change are just some of the common challenges that plague most new businesses. Their survival depends on several factors, but most importantly the sustenance of adequate cash flow.
Many new business owners have problems with maintaining cash flow. Most of them suffer from high overhead costs – advertising, paying workers, logistics, office space, and furniture – usually as a result of inadequate financial planning.
People have different reasons for starting their businesses. You may have started your business in order to unleash your inner passion, as a result of an opportunity, or because you were laid off from a previous job. Regardless of how you got into business, starting and running a business is pretty tough for everyone. You have to consistently keep your eyes on the results you want to achieve in order to stay motivated. You need to have comprehensive and detailed business plan, constantly monitor your competitors, stay flexible and consistently make innovative changes in order to offer unique and better products and services to your customers. Also, your approach to business should be customer-centric.
Actionable Tips for New Businesses
Frankly, this is easier said than done. However, your ticket to continue running your business in spite of hard times is the fact that most big businesses you see today went through this same process before they were finally able to stand. Here are a couple of things you should do to help your business survive and ultimately become a big business:
First, set up a “Profit System”
Cash flow is the lifeline of any business. If you already have a business and have developed a comprehensive business plan, mission and vision; your first and most important milestone towards business survival is creating a “profit system”. The quickest killer of businesses is cash flow; once it stops, the business starts to crumble. So, develop a system that generates profit very fast, and make sure you update the system regularly. There are three very important traits your profit system should have:
- It should bring new customers regularly
- It should be in your fastest and best growth area.
- It should have a timeline. After a deadline, you should upgrade your strategy based on your previous experience.
Then, ensure you build a team as soon as you can
Opportunities to grow your business will come. Without a ready team, you will lose most of these opportunities. You may have to involve your family or close friends. That’s the fastest and cheapest way to use other people’s money, time and energy. Simply let your family members know exactly what you are doing and how it will change your lives and also get advice from them and implement the good ones to make them feel comfortable helping you.As you build your team, focus on strengthening your backend. Many new businesses fall into the trap of expanding before they are capable. Learn to build inner capacity first. Make sure everyone on your team understands his or her role in achieving your business goal. The businesses that survive will be the ones that make life better and build trust; and this is not achievable without a strong backend.
Keep networking before you need the contacts
Business is all about relationships – networking and nurturing good relationships. This is really simple to achieve if you set your mind on it.
You don’t have to wait till you are thirsty to dig a well.
When opportunities come for strategic partnerships, welcome them. This is your sure bet against bigger competitors. Once you identify a partnership opportunity that can boost the potential of your business, harness it. Be prepared to act swiftly and make use of the opportunities that come. Also, look out for benefits you can get from the government.
Become a Master of “Yourself”
You have to be a master of yourself if your business will survive and grow. One of the major ways you can sustain adequate cash flow is by effectively managing your expenses. Separate your needs from your wants, and avoid the expenses that fall under wants as much as possible. Also, good time management is indispensable to business success. Properly organize your workspace, write to-do lists daily, set priorities and timelines and focus on your business strengths. Learn to courteously decline casual outings during business hours and discourage drop in visits from friends. Learn to also outsource jobs that can be better performed by other people.
As you do all these, you should regularly take helicopter view of your business and develop plans b, c and d. In doing this, you may have to seek external advice, because it is sometimes better to get the unbiased view of an outsider to understand the true picture of your business and how to improve it. Also, learn to take care of your physical, emotional and spiritual health. Ensure you exercise regularly no matter your schedule. Nurture your emotional life, maintain your devotion to God and socialize regularly.
Most importantly, learn to bounce back after every fall. Sometimes, things just go totally off course. Your business plan may be really awesome, but it can still fail. Learn to innovate regularly, rely on your inner strength, and don’t get discouraged by people or circumstances.