Preventing Failure

Factors that Help Prevent Failure

Although there are no magic guarantees that will ensure success for your small business, the following points should be considered because they will help your ultimate profitability.

" Network with other business owners in similar industries ..."

  1. Make sure you have enough money put together before you start up a business.
  2. Don't borrow money from the family and don't ask the family for advice (unless they have experience in that area).
  3. Make sure you develop a business plan and a mission statement.
  4. Always obtain accurate financial information on your business in a timely manner from your accountant.
  5. Make sure you profile your target customers.
  6. Make sure you profile your competition.
  7. Network with other business owners in similar industries.
  8. Don't go into the business unless you are doing so for the right reasons.
  9. Don't forget that the competition can always lower their prices if they need to compete.
  10. Remember the market can change because of taste or technology, etc.
  11. Be well informed of the resources available to you for help, from government or local organizations such as your local Chamber of Commerce etc.

Watch out for….
These are some survival suggestions you need to watch out for:

  1. Watch out that you don't lower stock levels too low.
  2. Watch out that you don't allow your debts to be uncollected for too long.
  3. Watch out that you don't have bad accounts that are not chased up.
  4. Watch out that you don't hold your cash for too long in the office - make sure it is banked.
  5. Watch out that your profit margins are not too low.
  6. Watch out that you don't operate in inadequate floor space for the business.
  7. Watch out that you don't forget to move staff into profitable areas.
  8. Watch out that you are not running your business with a lot of inefficiencies.
  9. Watch out that you are not taking too much advantage of using your credit card.
  10. Watch out that you are not delaying payments to your suppliers for too long.
  11. Watch out that you are not opening the business for hours that are not long enough.
  12. Watch out that you don't forget to review your interest rate periodically.
  13. Watch out that you are not identifying dead stock and not getting rid of it fast enough.
  14. Watch out that you are not allowing yourself to be burnt out and not enjoying the business.

How to Prevent the Business from Crashing Down

There is a wide range of entrepreneurial skills needed to operate a profitable operation. The more you have, the greater chance that you will succeed.

Here are some traits you will need:

  • Have energy: This means you have to keep a balance between your business life and your private life. Eat healthy and exercise as required. This gives you a healthy mind and body to work the long hours your business may require.

  • Have patience: Many business owners want to reach profitability overnight. They need to think in terms of working to a plan that will achieve positive success over a period.

  • Be well organised: If you are running a business you will find a lot of paperwork is needed. This may be for taxes, for the accountant, for record keeping or for the various forms of production or sales. No matter what area you are looking at, be organised.

  • Take calculated risks: There will always be risk in business, but it has to be calculated. In other words, don't make a move until you have looked at the consequences and weighed up the benefits from the cost.