You’ve started a business,
probably one that’s 6 months old. You’ve achieved the significant part
of your dreams but what to do when your business becomes a stubborn
child?
Whatever you do, don’t look it in the
eyes or try to confront directly. We’ve got ways to overcome some common
challenges associated with start-ups to help.
Finances
This is a broad category that I will break down into capital, cash flow and frugality.
When it comes to capital, the source that you pick matters.
Going along with family
and friends will definitely be easier but may not challenge you to see
little gaps in your business plan. Unless of course, your family or
friends are well versed with the business world.
Considering an investor or venture capitalist
that funds start-ups would be a good way to go about it. Investors have
prerequisites and question aspects of the business plan prior to the
receipt of the capital. This in turn builds a certain level of
confidence as you start out.
Savings are another option that can keep
you out of debt initially. But whatever you do, ensure you have passed
the plan through mentors in business who can analyze your business plan
and anticipate any red flags. So will it be Aunt Kabuga, an independent
investor or savings? Your pick.
In terms of cash flow, tracking revenue
versus expenses is paramount. Even without extreme accounting expertise,
it is important to track your books of account…what you pay suppliers,
employees, your sales team and what you are raking in return as revenue
and eventually attain as profit.
Frugality as an overall pointer of
finances cannot be overemphasized. When starting out, you are
essentially bootstrapping to keep expenses on the low. Find affordable
suppliers, use wise but pocket-friendly sales tactics, and cut down on
luxuries.
Market research
I find that this is one of the most underrated business issues. We are
living in a world of massive data yet, many businesses fail to do their
homework well before starting out. You may have the big business idea
figured but you must be willing to
anticipate and forecast market trends. Or else, you could end up building the business in your head than at the actual marketplace.
Research involves a variety of mechanics
and even better, a combination of these mechanics. You will need some
hours on the computer and in some cases, may have to buy data to check
on competitor information. The target market will be your next best
source of information. You need to sell something that people need.
Sometimes, people don’t know what they need till you sell it to them, so
you could check on that too. Research also involves anticipating
various changes that could affect the business and mitigating against
such.
Prioritization
Do you build a fancy website, set up a cool office hub or start out by
working from home? A number of businesses are encumbered by unnecessary
expenses as they set up shop because they lose focus on priorities.
A detailed business plan will
map out areas that need fundamental attention and those that can be
invested in later. Otherwise, you will keep having revenue that you
can’t amounts to nothing. It also helps to frequently ask the question,
“If I were to eliminate one thing in my business right now, what would
it be?”
Prioritization also depends on your
principal motive of starting the business. Were you genuinely seeking to
make money by serving a need in society or were you escaping the 8 to 5
employment vortex? The former is a lot more solid and while the latter
is valid too, you might be surprised that as you start out your
business, you need an 8 to 8.
Pricing
The way a business prices its commodities when starting out is critical.
Many proprietors price too low initially and do so emotionally. After
the low penetration price, the business begins to crawl weakly and are
forced to effect a surge which consumers may not have anticipated. It
then becomes harder to gain loyalty. Pricing rationally and suffering
from an initial low market share would have been much easier. As Maya
Angelou said, “Ask for what you want and be prepared to get it.”
Besides, only you can relate to the
hours you put into the business. Therefore, charge accordingly, not
desperately or emotionally.
The one-man guitar show
Are you taking on too many roles that you need help? This can take on a
heavy toll on your business. While it’s alright that initially you are
the strategist, salesman, accountant and admin, consider getting some
professional help once in a while. When you can afford some more, hire
great talent to sort you out. The two important aspects you really need
to consider, especially if they are not your core specialization, are
legal and accounting expertise.
Too much time in business could make
some relations suffer as you play a one-man guitar show. You also need
to maintain your support network of family and friends.
We wish you success in all your
businesses as you work through the challenges and would love to get your
thoughts and contribution on the topic!
Nelly Makena is a contributor to SLA. She strategizes, organizes and
inspires creative communication for brands. Project management of
trade/shopper marketing is at the heart of Nelly’s work. For more
articles like this, join the SLA community here.
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