There are all sorts of suspicions about the economy at the moment, but one thing that most of us know is that more and more people are starting their own business. Given that most of the world is under some sort of rule to stay indoors, most of these businesses are going to be online for the most part.
Particularly as we are in somewhat uncertain times, this is a giant leap. It’s also one that can prompt all sorts of surprises which can wreak havoc with that initial business plan that you put together.
Unfortunately, today’s post isn’t going to reveal each and every secret that you might require in your quest to carve out a successful business.
However, it might just reveal a few nuggets which will help your plight and boost your chances of success.
Employee retention is everything
There is a lot of emphasis on recruitment for new businesses, and rightly so. Something that a lot of start-ups forget is the power of retention though. You may have recruited an excellent team, but it’s all going to be for nothing if they leave after six months.
Let’s be honest, you’re never going to be able to pay the big salaries. What you can offer are plenty of non-financial perks though. This might be in the form of away days (check out a list of activities from teamtactics.co.uk) or simply just offering flexibility. In relation to the latter, flexible working (or even remote, if you can stretch as far as this) is something that has surged in popularity over the last few years and by joining this club it will be a huge incentive for your workers.
Calculate your tax obligations well in advance
It’s the word that everyone hates, but tax should be one of your first considerations as you bid to start a new business.
The days of trusting your employer to do this for you are long gone. Instead, the onus is on you. You can’t forget about this either; the last thing you want to be left with is a gaping hole in your accounts at the end of the year as you bid to settle with the authorities.
The perils of cash flow
If we were to offer you another invaluable tip it would come in the form of cash flow. Most of us are greatly concerned with attracting as many sales as we can muster during those first months – but we forget about the finances. Quite often, we’re relaxed about payment terms. After all, we just want the business.
Then, reality hits home. Suddenly, clients have taken advantage and you are owed considerable sums. If you’re not careful, you won’t be able to afford your own bills – and this is where a cash flow crisis begins.
Don’t forget the cost of your own time
Something else that a lot of new entrepreneurs fall foul of us not calculating the cost of their own time. In other words, they don’t think about their own annual leave requirements, or even the cost of paying for their basic living needs. This can mean that their whole business model is built on sand. Don’t fall into this trap – and always remember the real reasons you are starting your business. It is to boost your lifestyle; you’ve not taken this giant leap into the unknown to have less of your own free time. It might take time to get to that stage, but always make sure you are aware of this.
Every business has seasonality
You might know your industry like the back of your hand, but it’s only when you start trading within it as a business that you start to learn the real timescales.
Very few, if any, businesses operate on a consistent basis all-year-round. For many, there is either a slowdown or upturn around Christmas. Then, others might benefit during the warmer months. There are always peaks and troughs and while this is difficult to predict before your first year of trading is up, it’s important to just be wary of any fluctuations that might occur. Let’s not forget that these can be both good and bad. In relation to the former, you might not have enough stock due to immense peaks in trading. Or, in the latter case, your costs might be higher during the so-called off-season.
Introducing a new term – shrinkage
In some ways, this could be the biggest secret we reveal today. After all, shrinkage is a term that few of us have ever come across, even though it is estimated to cost the economy billions of dollars every year.
So, what exactly is shrinkage? Put simply, this is any unforeseen costs related to wastage or theft. It might be items getting damaged in transit, employee theft or admin errors. Regardless, if you don’t have any sort of contingency plans in your budget, your business will become victim to shrinkage eventually.