1. Detailed business plan
The business plan does not only help you to get some funding, but it also helps you to adjust your first business decisions. You can check every month if your turnover and your cost are as predicted and you have a tool to adjust to changed circumstances quickly. When you only find out after months, that you lose money, it can be too late.
When you fund your total start-up costs with a loan, the monthly interest rate and repayment can put a strain on your cash flow. Please make sure, that you can also cover your own monthly expenses.
Often start-ups expect customers to pay immediately after invoicing; this is usually not the case. There will be a gap, and you still need to pay your rent, salaries and your suppliers. Please check twice how much money you need to cover gaps between invoicing and payment. Otherwise, this can mean the end of your business.
Marketing does not only mean advertisement; there are lots of possibilities out there to get attention with no costs involves. It also includes analysing the market, your competition and your customers. Important is a proper site analysis. Where are your clients? Do you have access to everything you need like water, electricity, and easy access for delivery and customers?
Usually, start-ups have a lot of experience and knowledge in their trade. There is a lack of understanding of the commercial side of a business. To fill this gap with a business consultant, in the beginning, can decide between make and break. Use a business consultant to check on a regular base, where you stand, what are your next steps. Discuss what didn’t work, what worked, to find your way through the difficult times as a start up.
Every business needs to be flexible and react to changing circumstances and environment. Your business plan must show you every single step you want to go, to make sure if things are changing, you can adjust. Have a plan of action for every 12 months, what needs to be done and check if you did it. When circumstances change, you need to adjust your steps.
A lot of start-ups underestimate the required time and knowledge for their business venture. Make sure you discuss your ideas with other people, listen to second opinion and criticism. This gives you an opportunity to optimise your idea. You are not able to do everything on your own. Get a team and delegate tasks.
Talk to your spouse; this will be an exciting time for you, but also exhausting and time-consuming. You need an understanding and supporting family network around you.
Your books must be from the beginning on up to date. This is an important instrument to see if you are on track, and if you earn a profit or if you lose money. The quicker you can adjust and make plan B’s the more you can minimise your losses. Check once a month your figures. Ask a consultant to support you in the beginning, to make sure you don’t lose too much money. Keep in mind that you need to adjust your business plan all the time to the changing business environment. Use your business plan to planning ahead. This shows you how important this tool is to become successful. Every big corporate uses a budget and year plan to keep on track. They all check once a month their figures to be able to act fast on changes of the environment and minimise mistakes.
Many start-ups overestimate the profit and underestimate the need for investments. Think twice what you need to buy, get different quotes to get the best deal. Check on a regular base your monthly cost and see where you can get better deals.
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