Having over 50 years' worth of collective experience of running businesses, dealing with tenants, disputes and all sorts of other crises, we thought it would be useful to give you some useful tips on starting and/or running a business. Disclaimer: Please for god sake don't rely whole heartedly on this as advice; it's not. Seek independent advice as appropriate.
1. Start with failure
There are loads of websites and blogs dealing with the causes of how different businesses fail. It's therefore worth looking at those causes of failure which might effect your business directly and how you might address those risks. For example, many small businesses grow and eventually have to register for VAT, which results in 20% being added to their prices (in most cases). When that money is collected and sits in the bank, those businesses wrongly consider that all the money in the bank is theirs. Come the end of the quarter and the VAT is due - BIG CASHFLOW PROBLEMS. This could easily be avoided with some simple book-keeping.
2. Do a business plan going forward - and don't be afraid to ignore it.
There's a lot of opinion as to whether business plans are any good. Our view is that having a business plan forces you to think about the basics such as, what do you want (personally) from the business, how can the business provide that, what is your product; how will it be funded, will people want to buy it and so on? By writing these things down and building on what you have learned above, you are thinking about the risks and how you will address them.
It's also useful to build a 'critical path' into your business plan This is just a step by step guide to prove you know what steps need to be taken to fulfil the plan. If you don't know how you get from 'A' to 'B', the likelihood is that you will get lost along the way.
What you then need to do is keep reviewing the business plan and do not be afraid to stray away from it. Think of it as an early warning guide or insurance if things go wrong. A free template can be downloaded from the Prince's Trust HERE.
3. Cashflow, cashflow, cashflow
As with a good business plan, a cashflow is essential to ensure that throughout the year, you have enough money to trade. If a business is profitable, it could still fail because it does not have the cash at the bank to pay suppliers, the tax man and so on.
We suggest you use the free template from Natwest that can be found HERE.
As with the business plan, do not be afraid if the cashflow turns out to be inaccurate. It's a guide that needs to be regularly updated. As with the business plan, it's the best early warning system that will allow you to take measures to avert a risk.
4. Keep your overheads as low as possible
Imaging you are a marathon runner and you choose to wear leg weights in the most important race of your life? Stupid eh? It does happen in business. We have seen so many businesses start out well, then they go and buy a posh car or a rent a massive unit they don't really need. All this does it puts stress on the business to perform. In business terms, their overheads are too high and don't result in direct sales.
At Evans House, we regularly review how the tenants are doing and whether we can assist them. For example, recently we have split units to rent up into two or more units. This usually saves on business rates, rent, service charges, electric and heating costs for the tenant. Any money saved can therefore go back into your business and not someone else's pocket.
5. The Rule of Minimum Effort, Maximum Yield
Consider two men in business. The first man is an artist and has to take the time to paint a desirable painting and sell it for a high price to a fairly small market of people who still buy original paintings. The second man sets up a website that takes orders for a local sandwich shop; takes a commission for every sandwich sold, but otherwise he does no work for that money . Assuming the first man is not some celebrity that sellotapes pine air fresheners to a dead pig and calls it art which sells for a million quid - who do you think is more likely to succeed without trying?
Looking for a unit to rent to start a business or grow your business in Warrington, please contact email@example.com or 01925 411170.
Evans House's Blog author likes the sound of his own voice and couldn't find his a**e with both hands.