Article by Pat Sutton in Sundays Business Post 17 April 2014
There are lots of opportunities for start-up businesses in a recovering economy but with over 40,000 new start-ups expected to be registered this year there are serious challenges ahead if you are to stand out from the crowd and succeed
We know, depending on which statistic you use, that over 50% of start-ups fail in the early years. Apart from long hours of hard work which is a prerequisite of any new business, some careful forward planning and foresight can go a long way. Matters to be considered include;
Prepare a business plan even if it’s a very simple effort. Get a standard plan format and fill in the blanks. The exercise of completing the plan is valuable and will often lead you to coming up with a lot of important answers. Many start-ups do not prepare business plans unless they are looking for finance from a bank or third party investment. They do not understand its importance and why banks and investors place so much reliance on it. Yes your plan will probably change along the journey but that’s all the more reason to have a solid reference point.
Complete cashflow projections in advance, these should form part of your business plan in any event. Know your running costs, and how you intend to finance them. It’s essential to have a financial plan to follow and be able to refer back to particularly if things start to go a little pear shaped.
Start as you mean to go on so ensure you get paid on time. Do not offer extra credit just to get more business, this is the road to nowhere. As a small business you simply cannot afford to be someone else’s banker. If you take nothing else from this article do take cognisance of this advice.
Public Liability Insurance is essential in order to protect yourself and be a credible supplier or contractor. There may be other insurances required depending on the business sector such as Professional Indemnity Insurance, Motor or Property Insurance, or Travel Insurance.
So you’ve just invested in new tools, equipment and products, and about to hit the road with your wares. But have you considered the security risks in relation to protection of the assets. Businesses need to implement adequate security measures both on the road and back at base. If unsure about what measures to take consult a professional or the gardai.
Marketing / Sales
Being small, flexible and available, you have a really big advantage over the more established competitors who tends not to be as sharp or reactive, so use that advantage and turn your start up weakness into a strength.
Get set up with a website, facebook page, twitter account, and business cards. Develop your own brand and identity, how are you going to stand out from the crowd? What’s going to make you different for example is it going to be cost, service, expertise, technology, innovation or a different business model?
Really understand who your target customers are and their needs. Decide how you are going to get in front of them, be it through traditional advertising, social media, business networking, cold calling, existing contacts network, family or friends. Build a database of contacts and potential customers, and keep it updated.
Make sure you keep your financial affairs in order and up to date, know your financial position. Put in place good procedures for processing invoicing and recording costs, and develop appropriate easy to use reporting systems. If you do not have the time or skills to look after the bookkeeping yourself appoint someone qualified to do so. Revenue do not accept ignorance of the law as a defense so pay your correct taxes on time. Take advice from your Accountant at the set up stage to avoid problems later. Choose an Accountant who is commercially minded and understands the demands of start-up businesses.
You will be under pressure to manage day to day work commitments and deliver on the long term plan. You’ll need to take time out at night or the weekends to gather your taughts and plan ahead for the following week. Discipline, rigor and focus are words you need to get used to! For those of you with families include them in the journey and keep the lines of communication open. And finally, remember to have some fun along the way! Patrick Sutton, O’KellySutton Chartered Accountants and Business Advisers, Kildare, Sutton@okellysuttoncrosby.com