According to the Office of National Statistics, more new businesses are being registered every year. This probably explains why their statistics show that even more businesses fail every year too.
Ideally, knowing what the main reasons for failure are would give us a great list of things to avoid. The reasons stated in the Telegraph article indicate that it comes down to cash and cash flow. Firstly, a lack of it (lack of lending), poor cash flow and the rising costs of running a business combined with the UK tax system being a cause.
A practical risk-aware approach seems to be the answer then. Here are The Business Ninja’s tips to surviving the first five years and prospering.
Tip number one. Before you even launch your venture be aware of what’s happening in the market. Simple tools like a SWOT analysis enable you to understand your proposition, understand your product or service and give you an understanding of what is happening in the market that you’re launching into.
Review this regularly. Don’t be afraid to get a business coach, spend time on the business and not always in the business and take feedback onboard.
If you ask all the people that you know whether they have a business plan, I would estimate that only one in five does. These people are likely to have one because the bank wanted to see it before granting a loan or extending credit.
The common misconception is that your business plan needs to be a ‘The Apprentice’ style novel of a document. This isn’t true. Your business plan can be as simple as a couple of pages. I would advise stating what your idea is, include your initial SWOT analysis, set your objectives and revert back to this periodically so you know how you’re doing.
Most importantly and this might sound strange – consider your exit strategy.
If you still need a little help then you can get template business plans from the GOV.uk website.
Once you’ve created your business plan and you’re almost ready to launch consider your marketing budget and how you’re going to shout about your offering. Who is your audience, how are you going to reach them and through what medium?
Your marketing strategy is likely to change more often than your business plan and we would advise looking at it every quarter to make sure you’re on track to reaching your audience.
If your business involves repeat custom then you should keep details on your customers (within the confines of GDPR of course). Also, if you’re looking to sell the business further down the line, consider what a purchaser would want to buy. It’s likely that the goodwill, reputation and existing customer base will impact on the value so if you have a list of clients that use or have used your business what you have permission to market to, then this will be attractive to a purchaser.
Your CRM gives you information on what has been purchased, when, what your client’s details are and will help you to create and send targeted marketing campaigns. This should not be underestimated.
A CRM system doesn’t have to cost the earth either. A password protected excel spreadsheet is perfectly fine if it helps you to record everything you need.
We’re in a period of social change. Social media platforms are the norm, more and more people take to Google for advice or to review a company and your website (shop window) is likely to be the first place someone will look when researching you.
That said, make a good first impression. Make yourself accessible with live chat, easily accessible contact information and clear pricing information.
The Business Ninja has partnered with Win-Win Websites to provide a transparent service where the customer and their needs come before price. They’re in it for the long haul and want to see you prosper 5+ years down the line. Speak to their friendly team for a no-obligation quote. Mention The Business Ninja for three months free web hosting.
After turning to Google, people are likely to ask friends and family for referrals too. If you give someone a bad customer experience, they will tell between 8-10 people. Treat someone well and they will tell 2-3 people. This information comes from Howstuffworks.com amongst other sources. Customer service isn’t difficult to get right and whilst you won’t always agree with a customer’s point of view can you afford to risk the damage to your brand (even in the early days)?
Thanks for reading. Feel free to get in touch for more information. If you have a differing view, please comment below. We’d love to hear your opinion.
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Hopefully, there are some articles on the site that you find useful, and will help you flourish in your area of business.
Of course, if you have some words of wisdom you want to share, please get in touch and we can add you to our growing list of contributors.