Key points to focus on in the first year of trading
1. Inadequate business planning
Many entrepreneurs under estimate the importance of Business Planning and why keeping within the boundaries of a business plan provides advantages such as keeping focused, keeping finances under control and remaining on the right track.
Without proper business planning business owners will face many challenges which lead to risky decisions
Prior to setting up a business, a certain degree of market research needs to be carried out such as understanding your customer, know your competitors, recognizing the risks, marketing options, technology that could help the business.
The business plan is for a 12 month period and ideally reviewed annually to keep on top of the business goals and objectives.
2. Poor Management
Selling products and services and running a successful business require different skill sets. Hiring the right people and managing staff can be challenging for those without the necessary skills or experience.
Creating a strong management team will help a business grow strong and capable of adapting to change. Good management also creates a strong and loyal staff base who grow with the company and become invaluable.
Understanding of basic business concepts such as business strategy, focusing on a niche market, budgeting, customer service are all key areas of a business that need attention.
3. Financing the business
In the first year it is easy to overspend on building the website, advertising, recruitment and purchasing all the technical equipment you need. There will be companies out there eager to help you so prioritising what is necessary and what can wait is important.
Cashflow problems can soon escalate with expensive start up costs and overheads, but the unexpected problems can come from non payment and late payments of from customers that needs to be managed.
4. Ineffective Marketing
Understanding your market, getting the pricing right and advertising in the right places at the right price can all feel very over whelming for those entering self employment due to expertise in a chosen field.