It’s no secret that a high percentage of startups will fail. However, your startup doesn’t have to be one of them. Through a lot of strategic brainstorming and taking business management advice from professionals in your industry, you’ll make it. Putting the following tips into action won’t hurt either.
Optimize Your Cash Flow
Rarely does a startup have a steady flow of cash that meets the money leaving your business for all the expenses that go along with running your own business? Consider establishing a policy of getting a down payment or deposit for services ordered by your customers. Most buyers will not find this unacceptable or even unusual.
Many entrepreneurs are hesitant to request money up front and this often stems from fear. No one just starting out wants to risk offending their customers. Establishing a clear policy in advance makes it clear to everyone that down payments and deposits are not personal.
Give Customers What They Want
Whatever business venture you start make sure you know your customer base and what they want. Do not assume you know what they need. When a buyer purchases your product make it a point to engage them in a brief conversation. When you practice this with every buyer you turn them into customers. Loyalty goes both ways. Your customers place their trust and loyalty in you.
Your reputation inspires loyalty when you follow through on promises made to customers. If you do not know precisely what they want, you cannot keep your promise to provide the product they expect. Discovering what your customer wants takes good listening abilities. Resist the urge to jump in and answer your own questions. Let customers tell you in their own words what they feel is important and exactly what they want.
Obtain the Best Accounting Agency Possible
Accounting easily makes or breaks your business. This is one area where you cannot afford to take shortcuts or use inexperienced staff to cut costs. If you want success and profits beginning with your first year in business, then make sure your accounting services are impeccable. Check references and customer recommendations before deciding which agency to use.
Once you decide on an agency, sit down with them and ask their advice on everything. How to keep your records and record transaction is an obvious question, but your accountant has seen a multitude of business success and failures. They have a great deal of information available, but you must ask for it.
Send Rapid Invoices
Many people in business send invoices on a 30-day cycle. This is based on habit and routine, not any business requirement. Consider sending invoices with a 15-day cycle. Most of your bills remain due on a 30-day basis, so this gives you time to collect payments due before paying your bills. Furthermore, if you have a customer who is late paying their invoice, you have time to send a gentle reminder and receive payment before 30 days have passed.
Depending on your industry you may consider requiring immediate payment. When your business is in a consumable product, such as catering, this is a prudent policy. Customers find it easy to postpone paying for services they no longer need and have already used.
If you have already incorporated these ideas, then your startup is on track to make a profit this year. Build on your success and continue to use creative thinking with your business methods.