Starting a business? Four key areas you need to get right to succeed

Article by Tracy Johnson

If you read my previous article, you’ll already be across the three key things you need to consider upfront before starting a new business.

Here we look at another four key areas that you need to get right as you start your business and manage it through the all-important early stages.

Remember, 20 percent of business start-ups fail within the first year of operation. But that’s largely because the business owners repeat the same mistakes.

By considering the following four areas closely, you can avoid these same mistakes when starting your own business…

  1. Management skills and multitasking

According to research, the number one reason for business failure is poor management.

New business owners often lack the relevant business and management expertise in broad areas such as finance, purchasing, selling, production, and human resourcing.

To address this challenge, small business owners can educate themselves on the skills they require; hire employees who have the required skills; or outsource work to external professionals.

The “gig” economy is also growing and available to business start-ups to access specific skill sets on an ad-hoc basis.

  1. Choosing the right software tools

Software that provides efficiency and reporting metrics is paramount to starting a small business.

With cashflow tight and labour expensive, you may be trying to balance the books. But spending a slice of your budget on good software can add great value.

There are excellent cloud-based software products, such as Xero Accounting, which are dynamic building-block products for business start-ups.

Xero integrates with many operational software packages and phone apps and comes at an affordable price that allows quick and low-cost business expansion.

  1. Managing cashflow

Cashflow is the life blood of any business start-up. So planning and monitoring your cashflow weekly should be an important focus of your business once you’re up and running.

When you start up, you’ll need cashflow to cover both your business and personal expenses over the first 18 to 24 months, until you’re more established.

Many new business owners take a reduced salary over the first couple of years while the business cashflow improves. This needs to be factored into your capital requirements.

Other means of financing your cashflow include borrowing from the equity in your home or approaching a bank for a loan with a detailed business plan and cashflow forecast.

If possible, when you’re starting a business, continue to work in your current job either full-time or part-time and transition into your new venture while maintaining your income.

Starting a new business part-time can be a good way to ascertain whether your ideas and plans are viable and also allows you time to transition into your new venture.

  1. Request professional help from those in-the-know

Starting a business can be a challenging but a rewarding journey. Don’t try to do it all yourself – there are qualified professionals who can guide you.

The four tips above, together with the three tips provided in the previous article are a good starting point. They will help guide you through some of the potential challenges and increase your chances of success.

But the team at SRJ Walker Wayland can also partner with you to assist in the setup and planning stages of your new business venture.

If you’d like to discuss this further, please call me on 0407 037 713 or email me here: tracy.johnson@srjww.com.au