With start-up and entrepreneurial culture currently experiencing a boom, unfortunately, hand-in-hand with that is the reality that not all businesses succeed. Businesses failing is common place in today’s fiercely competitive market but speak to anyone who has owned a failed business and the advice will be the same – learn from your mistakes, do not make them twice. Often successful entrepreneurs have tried a few different ideas before succeeding.
According to a recent study, eight out of 10 companies fail within their first year. Now, there are numerous reasons that attribute to business failure and of course, there is no one size fits all solution, but there are things that all entrepreneurs can do to ensure that they stand the best chance at succeeding.
Whilst the list of what businesses do wrong is rather extensive, there are some main culprits. Leadership failures, bad planning, a lack of capital and no differentiation are some of the biggest challenges that businesses face, especially emerging SME’s.
You may have stumbled across this post because your business is on its last legs, or perhaps those cashflow forecasts you so diligently put together a while back have helped you predict huge issues ahead.
The team at Nucleus Commercial Finance have put together a few tips for entrepreneurs, with information on how they can avoid closing their doors for the final time.
For a lot of businesses, especially SME’s, the reality in the beginning is that it is a one-man band. But as things start to look more positive, entrepreneurs must grow and welcome others on board. This is an important part of scaling up, as learning to delegate where necessary is vital for the continuation of all businesses. It does not matter how exceptionally good a single person is, a hugely successful business cannot run with just one individual doing everything.
However, this is where the problem lies. Whilst it is important to delegate different duties of the business where possible, business owners still need to remain in the loop at all times, so they avoid dropping the ball. One of the hardest parts of being an entrepreneur is successfully keeping numerous plates spinning at once, and a common hurdle that many fall at is becoming remiss when the business needs them the most.
Marketing is a great way to push your business forward. Investing in marketing can give you an edge and help you to start carving out your niche within your market in a consistent and strategic way. It is no big secret or hidden industry gem – literally every great business in the world has an amazing marketing team behind them.
Staying in touch with your customers is essential if you are to keep your business doors open long term. Funnelling your efforts into understanding what your customers want – and need, should be at the top of any business owner’s priority list.
It really does not need to be a daunting task either. We understand that for many busy SME’s, taking the time to have a face-to-face chat with every customer to get feedback is just not possible, but it does not need to be either.
Instead, invest a little money into one or two of the marketing software options out there and poll your contacts that way. Email marketing is one of the most inexpensive ways to reach your audience, with MailChimp and Campaign Monitor being strong contenders.
Everyone knows that no business will succeed without the right funding. Having capital to play with is vital as businesses can and will come across unexpected financial hurdles. However, thankfully there are various different avenues that businesses can explore to attain the funding they require.
Sometimes, cash flow can become a little strained and it is not exactly surprising – withal the outgoings and overheads that a small business must shoulder. There is rent to pay, utilities, insurance policies… not to mention the employee salaries and stock demands.
But try not stress yourself out too much, as there are of course products out there to help. The alternative finance sector is especially fantastic at taking the time to see your business and supporting businesses to overcome their financial challenges. As a result, there are numerous products out there that have been tailored to provide the necessary solutions for all kinds of scenarios.
Scaling down a business is never a comfortable process but sometimes it can be a necessity. We understand that no business enjoys letting staff go or closing its doors to some customers, but sometimes we have to do things that we do not feel good about to get the outcome we desire.
Sometimes, you may have no other choice than to reduce costs by downsizing the business.
A good place to start is by evaluating the needs of the business and identifying areas where you can pull back financially or streamline costs. That may mean moving location into a smaller office or selling unused equipment in an attempt to raise more working capital. A lot of businesses find that auditing all outgoings will highlight many obvious areas for savings that were previously just not very efficient.
Reducing the workforce is another option, as staff salaries often eat up a huge chunk of the profit margin. If you are smart about the process, and get to know your cash flow cycle, there may be ways to dial up and down the support dependant on seasonality.
If your business needs to retain the same amount of staff, you could look at utilising contracted or temporary employees instead.
If you are experiencing cash flow challenges or want to realise your business growth plans, get in touch with our team of Funding Specialists today on 020 7839 9451 or email [email protected].