Starting a business can be tough especially when it comes to funding, marketing your business or even drawing on customers.
Generally, 70% to 80% of African businesses fail within their first five years of running. Here are ways to ensure that your business survives its first year:
- Don’t wing your business plan rather write a formal business strategy. The process of writing your business plan can help you to sharpen your vision and identify potential risks for your new company. The document should detail items like the problem that you are trying to solve in your market and customers that you are going to target. The plan should also include milestones like launch dates, funding plans, costs and competitors.
- Spend as little as possible because new businesses generally fail when they run out of funding. It is imperative that you keep your cost base as low as possible while you wait for revenue to flow in. This tip is important especially if your business has long cycles in the industry or you need to spend time developing your product before you can start selling it. Some of the ways that you can save money include using cloud software rather than buying expensive software licenses or using contractors and freelancers rather than hiring full time employees so you can access skills on demand.
- Get professional advice where you need it. Professional Human Resources, tax and financial advice is worth spending money on. A good accountant can help you achieve significant tax efficiencies, highlight ways to save money and give insight into financial trends in your business. Good HR advice can also help you avoid expensive disputes with employees or making poor hiring decisions.
- You might have plans to expand your business but it is better to focus on one region or product line. Start in an area that you know well, then you can learn, develop a revenue stream and scale out to more national or even international markets. If you attempt to try and cover many regions or offer lots of products and services in the first month, you could spread your financial and human resources too thinly.
- Automate your business as much as you can from payroll, invoicing and accounting to marketing and customer relationship management. This will save you time and help you avoid any human errors such as miscalculating PAYE for the month. You will also benefit from easier compliance with tax laws and have access to data you can use to make good business decisions.
Author: Gesture Chidhanguro