Starting a business involves some somewhat daunting stats – and the media certainly don’t do us any favours for our nerves. After all, year after year, we’re bombarded with damning statistics that tell you the chances of succeeding in your new enterprise are slim.
Well, today is about shifting the balance. If you have taken the plunge to start your own business, read the following advice, which will showcase some essential tips to help you boost those crucial profits in your first year of trading.
One of the main reasons businesses fail in the early stages is that they cannot manage their cash flow effectively. This usually comes down to poor bookkeeping and organisation. You need to be rigorous in your approach to recording your income and expenditure and have a system in place for invoicing and payments.
We touched upon all of those scary statistics in the opening to today’s article. One of the big things that many of these have in common is cash flow. They all touch upon it and state how much of a problem it can be to any new business.
There’s more to maintaining positive cash flow than keeping organised – but it will certainly help your plight.
Keep your overheads low
It can be tempting to splash out on a swanky new office or high-end equipment when your business is starting up. However, it’s important to keep your overheads low in the early stages. This will help you make a profit and give you some breathing room if things don’t go to plan.
There are many ways to keep your overheads down, from renting office space instead of buying to using cloud-based software instead of purchasing licenses. There’s an even more extensive list on this page.
Charge what you’re worth
Many new businesses undervalue their services and products, which is a costly mistake. If you can demonstrate the value of your offering, you will be able to charge a premium and boost your bottom line. Remember to understand how much your time is worth and all of the hidden extras you need to budget for, such as VAT.
The last thing you want to do is charge the bottom dollar for your services – and be stuck there for the lifetime of your business. After all, if everyone has chosen you because of price point alone, you’ll always be seen as the budget business without any hopes of raising prices. Ultimately, your time won’t be as valuable, and one of the key benefits (i.e., being more flexible with your time) of starting a new business has already evaporated.
Take advantage of every initiative you can find
The amount of official help available to new businesses is quite incredible. From government schemes to private-sector initiatives, there are many opportunities for new companies to take advantage of. Make sure you research all of the available schemes to you and make the most of them.
This is especially important in the early days, when you may be cash-strapped and need all the help you can get. In some cases, this is almost free money, which shouldn’t be turned down by any business, let alone a new one.