We don’t simply rescue businesses from insolvent situations; we also help businesses to grow and run more effectively than they did previously and it is worth understanding some basic essentials that any start-up business requires.
The provision of free business tips is part of our ethos as directors have enough to cope with. Business Plate Spinning:There is plenty of research that says 34% of start-up businesses become insolvent in their first year and must close so if you want to avoid insolvency there are few basics to follow that should help.
The ‘Art’ of Delegation
Typically, a business starts off small, with only a few people involved and grows organically and then, if successful, has to begin addressing delegation processes to help manage the work-load correctly. Without sufficient delegation and accountability processes in place, something may become neglected and will inevitably go wrong. However, there are only so many ‘plates’ that you can spin at any one time and if things are successful and sales start to take-off the need for delegation becomes even more critical. The ‘art’ of delegation is named this for a very good reason as this excellent article clearly explains. It is not a skill-set that everyone has hard-wired within them and may require time and practice to get it right. Like most skills, it is often improved through learning by your mistakes; the key is to try and minimise the amount of mistakes that you make; better yet, learn from other people’s mistakes if you have their experiences to use for guidance.
The decision to grow via taking on more staff is a difficult one, and I know the new staff themselves can cause sleepless nights with worry also, as well as creditors, as there is a significant amount of responsibility that comes with the territory.
Growing organically can also cause difficulty as quite often a wife, or husband may be drawn into the business by default to help manage the infrastructure. Once involved, in the heat of business it is difficult for the ‘spouse’ or ‘life partner’ to extricate themselves as they become more and more relied upon as an integral supporting part of the inner-workings within the business. The first thing that suffers is often the very thing the director or business owner is working for – his/her family. Business conversations around the dinner table, or even missed meals caused by arguments may pass the stress and strains on to the whole family unit.
Typically, it will be a mistake or a disagreement over a key decision or direction of the company. However, it is the family that may suffer without a strict set of rules that all adhere to, governing who makes the decisions, when and where business is discussed outside of business hours. As Michael Corleone’ says from the Godfather film – “it’s not personal, it’s just business” and keeping the two separate is critically important to overall success; however challenging this may be.
Without setting the ground rules you are headed for a potential personal and possible disaster. Director disputes; company liquidation and even winding up petitions fall out of lack of appropriate planning.
Where Does Your Revenue Come From?
One important point for any business is to understand where the business revenue is generated? By that I mean do you as, a businessperson, know where your sales come from? How much time is spent by you driving these sales to your company? Most directors and business owners do not have the answers to these questions and may just advertise in a newspaper; stick up a website and wait for the phone to ring. If you are not investing at least 10-120% of your time each day thinking of new ways to create sales then your business may remain, at best, mediocre. Unless you are extremely fortunate, most businesses will simply fail long-term unless you put more effort into understanding just what makes your business’ sales tick.
Move With the Times
Did you know that around 40% of businesses still do not have a website? This is a shocking figure in this day and age, and although it shows how far we have come, it also highlights just how far we have to go, as far as the internet is concerned for businesses. The internet is still in its infancy stage, but for most businesses, you must be involved to survive; let alone thrive. If you think Twitter, Linkedin, Adwords and SEO are all a foreign language then get someone to work for your company who can translate this into a business language that you can decipher and understand. Most cannot afford to not be included in the online world and if you have a website, then you will almost certainly need expert business help. If you want to avoid becoming an insolvency statistic then invest time in increasing your understanding of your company and what ‘makes it tick.’
Buy-in the specialist experience or knowledge if you can afford it, read the book on the subject, attend a seminar, watch a DVD, do them all; but learn from other people’s mistakes where you can, it is a lot cheaper.