One of these is not good, 3 is worrying, and five or more is a serious problem:
- A failure to assess, monitor and plan for the risks facing the business
- Reliance on very few suppliers or customers, or even a narrow market segment (record-labels anyone?)
- No succession or contingency planning in case key individuals become unavailable (through illness, departure etc)
- Using overdraft or other short-term funding on long-term assets (withdrawal of bank funding is becoming an increasing occurrence and the consequences could be terminal)
- Growing too quickly (it is not unheard of for the capital required to fund stock and debtors to exceed the funding available from taking credit from suppliers and banks)
- Inadequate monitoring and reporting of the cash position and future cash requirements
- Accounts that arrive too late, are inaccurate or focus solely on the distant past. Also beware if the key business indicator (such as order-book) is not part of the traditional accounting process and not regularly monitored, particularly for decline
- A business model at risk of being undermined or superceded by the internet, other technological changes or cheap competition from China
- Exporting/gifting your Intellectual Property to China, India et al
- Non-existent or sycophantic management team – no one who dares put an alternative view to the boss (or they will not listen)
Start-ups are a hot topic: and tempting when salaried employment is hard to come by.
- Research your idea before committing time and money to it. Just because you think it is a good idea does not mean the rest of the world will. So ask your target audience if they would buy from you, not your loving family and friends.
- Research your own character. Are you the right personality type?
- Cost your time. if you can get from set-up to revenue generation a month earlier, what is that worth? Hopefully a lot more than skimping a couple of quid by not delegating mechanistic stuff like government form filling.
- Do not let the box-tickers tell you you need a formal business plan. You don’t.
- But you do need to understand how your business will work from every angle – use the Business Model Generation canvas, with lots of post-it notes so you can assess several variations. When you get the version that seems to work best, do document how things are going to work
- You will now have lots of tasks in mind to do. Document and manage them using Goalscape – it allows you to also record and easily visualise progress. It is worth thinking about the critical path too – no point doing lots of quick things first, and only starting the the long, delay causing task when the others are done!
- All this will also highlight the multiple skills that will be required. If you do not feel confident on sales/marketing/IT/accounting/Tax/engineering/etc/etc, we can help you find someone who is
- Funding is always a challenge (if not impossible to get) for start-ups. So “bootstrap” as much as you can. Don’t leave your old job until you have dedicated lots of weekends and evenings to your new idea – keep the cash coming in as long as you can. If you still need funding, look to friends and family (an uncomfortable step perhaps, but they are your best bet: offer them interest, annually paid, of at least twice what they currently receive – if you cannot afford 6% in the long term you need to go back to the drawing board!) but do not hold it against them if them cannot oblige. It is far easier to obtain funding if it is to buy equipment or for other business development purposes than it is if the need is to fund salaries, yours or someone else’s. ‘Equipment’ means tooling, and the like. The swanky office, laptop, furniture or car must wait until you are making profits. In the meantime, its ebay and the spare room for you. The best way to save money is not to spend it!
- Customer service is fundamental. Make sure, above everything, that you return calls or respond to enquiries promptly and efficiently. Don’t bullsh1t – only make promises you can keep – then make sure you do. Infinitely better to under-promise and over-deliver than the other way around.
- Chose a bank where you can develop a personal relationship rather than just become a number on a screen. But always bear in mind that a bank managers default approach is “what happens to me if it all goes wrong”
- If this will be your first company, you will be amazed at the number of bear-traps government departments have created to fine you for non-compliance with something. There are lots of free web-sites that will send you email or SMS reminders
- Unless you sell online, do not get hung-up on your website design. You do not have to spend a fortune on it. Save the designer fees and get an SEO guru on the case instead. Far more bang per buck. You need to know that static websites are not really going to help much with your marketing. To get noticed, you will need a blog based site like this one that is based on WordPress. Google is a monster that needs regular feeding with new content
Well, how counter-intuitive is this. I love it.
Even wondered why all those mis-spelled, laughable spam-fraud emails come from West Africa, and Nigeria in particular. Surely, their very source flags their untrustworthiness.Well yes and no. They are actually being surprisingly clever. They know that most of us will ignore their missives – but in doing so, we, the 99.99% majority, filter ourselves out of their random sample. Whereas anyone who is sufficiently ignorant to take them seriously and respond has by definition self-selected themselves as a gullible victim in waiting.
The scammers could not possibly follow up every response if we all pursued their offer, so their weird logic actually helps them select their mark(s).
This has got me wondering how I can apply this upside-down logic (ethically of course) to benefit my own businesses.
The research paper this comes from is here
In the statistically unlikely event you were going to opt for a Nokia or other winphone7 device, reconsider, or at least wait a while.
MS have announced these phones will not be upgradable to Winphone 8 when it comes out in the autumn. What is worse, they have been prevaricating on answering this question for months although it is hard to imagine they have not always known the answer.
So, Nokia 600-900 owners, you have been cast adrift, albeit with a small paddle of a compromised new version 7.8 (from 7.5)
Microsoft, I despair of you. Is there anyone left at Redmond who understands the concept of, and need for, customer trust?
I want MS to provide a real choice in this arena. I want to want one above an iPhone. I think Win8 could be really interesting. Am I the only one who wants to slap Steve Balmer before handing him his P45?
I’ve been saying for some time that MS are on a slippery slope, but why to they keep pushing on the ski-poles?
I have been quite busy on sailing website forums, partly ‘cos I love it but mostly to promote my book.
I was using just pointed to the website and not a lot was happening frankly.
Then, a couple of day ago, I changed the sig to less subtle, rather immodest, Great new book for Club Sailors and sure enough, my inbox is pinging satisfyingly with sale notifications.
Now I need to work out what else to change
PS Whilst I am at it, its still not to late (at the time of writing) to receive one for Fathers Day for the dinghy sailor in your life