One of the best ways to avoid your business failing – whether you’re a freelancer or whether you produce goods and services with a team of people helping you – is to get some practical knowledge and advice at the start. The more you know the less you have to learn the hard way! Here are ten ‘what I wish I had known’ pointers you should consider before taking the plunge:
1. Start small and keep your overheads low. Don’t spend any more than you have to on your start-up. Plenty of big businesses started very small: Laura Ashley began on her kitchen table, M&S started with a market stall, Tesco was just a couple of local grocer’s shops at the beginning. So don’t rush out and get yourself a big posh office, start in your bedroom if you have to. Don’t rush out and buy the latest laptop and phone; use what you’ve got until you’ve made some money and new kit becomes essential.
2. Cashflow. Don’t assume that people will pay on time – most don’t. Cut down your waiting time by getting them to agree your payment terms at the start. Be clear that you will charge 8% over Base Rate for any invoices that are not paid within 30 days. Also, don’t spend money now assuming you’ll have some coming in soon. You probably won’t, so wait until you have the money before you spend it.
3. Do a plan. As the saying goes: ‘If you fail to plan you plan to fail’. Even if you are just setting up as a freelancer you need to have a basic idea of what your costs are going to be each month and how much you think you could earn. Make yourself a chart for the next twelve months. Put down your estimated costs for each month and then give yourself a ballpark figure of how much work or sales you think you could make as the months go on. It’s a tough thing to guess but just the action of thinking it through will provide you with earnings goals and things to consider as you run your business.
4. Network. There more you are ‘out there’ touting for work the more likely you are to get the work. With the internet it is possible to meet people without leaving your desk. Join online networking groups and forums and start chatting. Try and make the time to get out to networking events in your area and make sure you take your business card with you wherever you go – you can meet interesting and potentially useful people anywhere. Who knows who you might meet at the gym, a wedding, at a conference or even on the bus!
5. Put the hours in but take time off. You will be amazed at just how much time your business will take up for the first year or so, mainly because there are so many things that need to be done and only you to do them. You will need to do your own sales and marketing, finances, production and management for a start. It’s not unusual to have to work seven days a week as a start up. However, make sure you slot in time off here and there and take actual holidays a couple of times a year.
6. Create a structure for yourself. If you have left full-time employment you will find it hard at first to work without a corporate structure. Set yourself specific work hours and, if you have the space, create an ‘office’ area in your home where you work and do nothing else. You may find it helps to set up a routine for yourself – perhaps a visit to the gym first thing in the morning then your working day starts.
7. Learn, learn, learn. The more information, help and advice you get before you start and while you are getting your business together the more likely you are to succeed. Take business courses, read books on setting up a business and talk to people who are doing what you want to do to get their advice. It can make the difference between success and failure.
8. Connect with supportive, helpful people. You can feel very alone running your own business. Seek out positive, supportive people who inspire you and give you help. Keep away from negative people who drag you down or criticize. If you can, find a mentor – someone who also has a business in a similar area who will give you advice and useful contacts.
9. Set up passive income streams where possible. If you have a website consider incorporating Google AdSense on it (these are Google AdWords that site on websites and make money for you when people click on them). Think about writing an eBook on your business subject and selling it online. Try to set up things that will make money for you without much effort so that you have more time to do the time-consuming parts of your business.
10. Keep the financials in order. Businesses often fail because they have forgotten to put money aside for the tax bill or the VAT bill. Also many small businesses pay far too much tax in the first few years because they have not kept enough receipts for business expenses. However boring it may seem, make sure your book-keeping is up to date through the year and set aside money each month to pay tax and VAT when it comes up.[sc:publicidad ]
Jasmine Birtles is the founder of the money-making and money-saving website http://www.moneymagpie.com.
Jasmine earns her living as a finance journalist, expert, TV presenter and is author of 38 books including the latest, “Beat the Banks!”
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