1. No business plan. First time business owners can sometimes leap into running a business without proper experience and understanding, leading them to start without a proper business plan. Not having a plan leads to a lack of direction, which can then lead to poor decisions and bad communication. Even if you have lots of excellent ideas, your need a formal plan in place. A carefully constructed plan will help you to launch your idea, saving you time and money. It will also help you to solve future problems and guide you in working through problems.
2. Trying to take on too much. The first year of business can be tough, as you can’t be good at everything, but money is often tight the first year making you reluctant to hire much help. It can also be difficult to let go enough to let someone else be part of your new business. If you can, bring in an advisor to help make the tough decisions and guide you through. Be realistic about what you are able to do yourself and where you would be better off hiring a specialist. For example, bringing in an accountant to manage the finances or handing over your IT to someone like www.egistech.com.
3. Bad management. Finding employees in your first can be difficult, thanks to tight budgets. If you are able to take on employees, it is important to manage them in the right way. As a small company, it can be easy to assume that your staff will put in the same amount of work that you, as the business owner, are putting in. This can lead to you putting too much pressure on them, which can drive a high staff turnover. Be honest with your employees and allow them to set clear boundaries. You should set fair and realistic targets, and account for any shortcomings in your business plan. Reward staff who do go above and beyond to encourage loyalty.
4. Financial problems. Financial issues are very common issues in the first year of business. These can be caused by new entrepreneurs having a lack of understanding about business financing, or by them underestimating how much money the start-up stage will require. These errors can falter a business before it really starts. With your business plan, you can better work out how much money your first year will need to succeed. Allow for costs and realistic income forecasts so you are prepared. Cash flow can be difficult in the first year too, but be careful not to fall into bad habits like late payments of invoices.
Many of these common early issues can be steered away from by building a proper, in-depth business plan and by taking advice from those with more experience.
