Taking The Plunge In A Recession
Some top tips if you are thinking of starting your own business:
- Do not be put off by the downturn. Many companies will be reconsidering their cost base and you may be able to offer a more cost-effective solution. Adversity stimulates change.
- Don't leave your job too soon. Develop your new project at weekends, in the evening or in your lunch break for as long as you can. You need to keep the cash coming in and when you make the leap, make sure you are not going to run out of it.
- Do not take on overheads. Fancy offices and expense accounts can wait. Be ruthless about keeping fixed costs low.
- Do not spend money on shotgun advertising. PR and targeted advertising is a much better bet for a young company.
- Do not engage expensive professional advisers too soon. Learn the basics yourself and tap into free advice available from the likes of Business Link and Connect Yorkshire!
- Do not rely on bank debt exclusively (chance would be a fine thing). You need a range of sources of finance. Equity, leasing, invoice discounting, customer discounts to pay upfront (or even before you can ship anything to them if you can).
- Do not be too ambitious, too soon. By all means dream, but set achievable goals and realistic targets. You need to get to base camp before trying to reach the summit of your ambitions.
- Know your customer. Every product needs tweeking once the first customers get their grubby hands on it - don't expect to get it right first time nomatter how hard you try.
- Know your market sell into it well. No matter how good you think you are, you need to beat a path to the customers door and not the other way around.
- Keep going. You have to be in the game to win it.
To find out more about getting fit for finance and developing your business idea, come to our upcoming Investment Readiness seminars.
3 comments:
Nice tips, I would also add to the first one that when starting a business you should look into areas that are profiting from the current situation. I read an article that talked about hundreds of businesses that have enormous amounts of sales. Usually businesses that offer a cheap way of living since everyone is saving money these days.
Take care, Elli
Beware of accepting Working Tax Credit as a means of income my experience is that the revenue will demand the repayment of all tax credit payment made to you
Maxwell Ward Business Consultant
6 quick tips
1. Make sure you have at least 3 customers, lined up before taking the plunge.
2. Cash flow will be the key. So get as much money, in terms of a deposit, before you start any work.
3. Get advice from a good accountant too!
4. Ensure you are constantly developing your skills Get regular free hints and tips
5. Run the idea for your business with a professional as well as family and friends. Often family will say 'that's a great idea', it is wise to get impartial professional advice to help you make a decision.
6. Marketing is vital, you can be the best at what you do, but if no one knows about you then customers will not come.
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