The Prime Minister recently made a plea for individuals to continue to set up their own businesses. It is common knowledge, however, that around half of businesses fail within a year and a very high percentage fail to last beyond the five year mark.
However, taking some time to understand a few of the key areas to get right when setting up a business, as well as being aware of support services of which they can take advantage, could make a considerable difference.
Cash Flow
Understanding and keeping on top of your cash flow is important. Late payments and unpaid services can result in poor cash flow management which in turn results in failure. Knowing how much you will owe in tax and national insurance contributions for instance is vital and having a detailed account book of all income and expenditure is a must.
Remember that there are services such as qualified bookkeepers who can help you manage this aspect of your business.
Paying Staff and Suppliers
An important part of running a business is keeping your employees happy, and nothing makes them happier than being paid on time. However, careful cash flow management is vital to ensure funds are available on time to meet the wage bill. The same goes for paying suppliers; fail to pay on time and you could face a frozen account which could lead to services being placed on hold that you need in order to run your business.
Planning
Lack of planning is a cardinal sin that will almost certainly result in a failed business. Knowing where your business is, where you want it to go and how it can get there are questions that you and any potential investor should and will want to know. A qualified bookkeeper will know the ins and outs of business plans so contact one for expert help and advice in putting one together.
Do not be one of the thousands of businesses that fail to stay afloat. Follow these simple rules and you'll have a better chance of success.