Starting a business is an exciting adventure that can come with an enormous amount of risk and stress. It can sometimes be painful, keep you awake at night, force you to make difficult decisions that challenge relationships and put you in uncomfortable situations. However, with endurance and commitment, the benefits will eventually come. Let us consider some challenges of building a business.
Knowing the Changing Marketplace
As the market changes, so must a business and the products it offers. This is particularly true of a fledgling business that may not have history or reputation to rely on and its X-factor is instead the ability to change and adjust with trends.
Financial control is important in any business but when a company is new without large amounts of capital, it is absolutely vital to control every part of its finances. A business must have good cash flow, which will enable it to absorb any setbacks a lot more easily without dipping into savings or racking up credit with suppliers.
Securing good cash flow is difficult for a new business as the temptation is to make yourself attractive to clients by offering lengthy debtor days. In doing so however, the company must use credit options with their suppliers, placing them in jeopardy should the client pay late or default altogether. It is extremely important to protect the company financially when it is at its most vulnerable in those early days.
Another temptation when starting out, is to collect the most qualified and experienced of staff and to, of course, keep them happy with attractive remuneration packages and benefits. Although there is nothing wrong with this notion, it can place undue financial stress on a new business, particularly if business is slow. Therefore, it is important to balance talented staff with experience and credentials so that the best mix of a team can be hand-picked for the company’s long-term success.
Taking a Step Back
It is natural to try to micromanage every aspect of the new business to ensure everything is running at 110%. After all, does this not equate to 110% growth? The short answer is ‘No’. It is important to balance everything, including one’s time and perspective. Indeed, you must be concerned with the details on an everyday basis and ensure each customer enjoys the best experience possible. However, the bigger picture is also exceedingly important. Zooming out and considering all variables in the picture can facilitate more strategic decision-making.
In keeping with the same idea, planning and almost ‘dreaming’ for the future is imperative for the new business. Despite the fact that so much time is dedicated to getting through each day and dealing with issues as they arise, it is still important to devote some time to planning for the future and formulating milestones to measure success. This will keep the company moving forward and will provide direction when tough days arise.
Having Systems in Place
As with any endeavour, having sound systems in place are the key to keeping things ordered and in control. A significant area for attention is the inventory stock and how it is controlled. Inventory represents a large portion of the company’s capital and it is important for the company to have good cash flow for success. Therefore, an inventory management system is worth considering and putting in place. While some businesses can and do conduct inventory control manually, it’s in the business’ long-term interest to automate their inventory systems. This can not only facilitate ordering so that capital is not lost in expired or obsolete inventory, but they can also help to ensure there is always product available for customers.