When you read about business gurus, you often come across people talking about taking risks or a leap of faith. There’s nothing wrong with being a risk-taker, especially if you’re in a good position to try and take your business to the next level, but there’s a lot to be said for being cautious and even slightly neurotic. If you’re new to business, you’ll be all too aware of the high failure rates, and often, it’s best to prepare for the worst and hope for the best.
Suring up your finances
Cash flow issues are among the most common causes of business failure. If you haven’t got enough money coming in to keep going, there’s often no option but to fold and admit defeat. Growth is a goal for most entrepreneurs, but there’s a time and a place. Don’t try and expand before you’re turning over a profit. Even if your sales are on the up, this doesn’t necessarily mean that the company will be in the black. Pay off debts before investing more money and seek expert advice before borrowing money or plowing more cash into the venture. Keep an eye on your accounts from day one, and try and identify ways you can save money, as well as measures you can employ to increase sales.
Being aware of your responsibilities
Owning a business isn’t just about sealing deals. When you start a company, and you hire employees, you take on responsibilities for keeping those people safe. If you’re not aware of what you need to do to ensure that your company complies with health and safety measures or employment legislation, there’s every chance you could end up with a lawsuit on your hands. If an employee is injured as a result of using faulty equipment, for example, they have every right to see workmans comp doctors and legal representatives and pursue a compensation claim. It’s always preferable to go the extra mile to ensure that your business is compliant and that you’re doing everything possible to prevent accidents and injuries.
Drawing up a plan B
Even the most experienced entrepreneurs come up against challenges, and most have tales to tell about being on the brink of failure before rising from the ashes. It’s not always possible to prevent disasters, such as cyber attacks, theft or flooding, but preparing for the worst and having contingency plans in place can help you respond quickly and minimize the impact. Think about what could go wrong, and work out how you would react. Invest in insurance, have procedures in place to cover sick days and work out logistical solutions to unexpected traffic issues or delays caused by adverse weather conditions.
In business, it pays to be prepared. Sometimes, it’s worth taking risks, but it’s also beneficial to know when to proceed with caution. As a new business owner, it’s always wise to think about what could potentially go wrong and to try and prevent problems before they occur. If things don’t go to plan, this means that you will be able to respond and recover swiftly.