Is your business a winner or loser?
Phew – another exhausting weekend is complete Chez Tucker. There’s been swimming, judo, football, cricket and multiple hockey and rugby matches. All three mini-Tuckers have been in action and once again, like so many other parents, I have operated Mum’s Taxi as a full-time service. Fortunately, the scores have gone in our favour (no crushing defeats) so there have been no tears of disappointment to mop up.
My kids are fiercely competitive. This is probably fuelled by having 2 siblings constantly vying for attention. They head onto the sports field with one aim: to win. The result is everything. Obviously games don’t always go their way. There have been plenty of opportunities to learn lessons about dealing with defeat or chances to note areas to improve in the next game. In fact, after today, Emily will be keen to avoid scoring another own goal on the hockey pitch. However, she will learn her lesson, regroup and be out to avoid making the same mistake again.
Do you have an aim? What result will mean that your business is successful? How will you achieve this? Everyone starting a business has different end goals. However, in virtually all cases the one thing that you will need to deliver that goal is money. It’s a reality that cold hard cash brings choices and opportunities for the entrepreneur. When times are tough, and we all know that there are plenty of those challenging moments in the early days of a new business, it’s important to retain focus on your personal objective. Combine this with a close eye on the business finances and you are already ahead of the game.
Apparently, fewer than 50% of new businesses will survive 5 years. That’s a scary fact and not one you want to dwell on if you are currently embarking on a new project and throwing all your efforts and resources into it. Why is the figure so bleak? There’s no escaping from the truth that the number one reason that businesses fail is lack of cash. Good cash management from the very outset puts you ahead of the competition. It’s important to understand and provide for your payments to staff, your fixed costs (such as rent), your tax (yes – even though you don’t want – it’s essential) and to establish a regular income for yourself. This will allow you to see how much money you have available for discretionary spend and to invest wisely in areas such as marketing, IT and office expenses. The cash should be working for you and helping you generate sales.
If you are reading this knowing that you are in control, that’s fantastic. Remind yourself of your desired result and check that you are on track. If you are reading this and feeling a sense of panic, don’t worry. Like Emily, you can regroup, reset and get yourself match fit quickly. There are so many tools available to help. Most accounting systems now allow you automatic real-time links to your bank account; modern bank accounts offer apps to allow you to track your ongoing income and spend. It’s really never been easier to stay on top of your numbers. Check with your accountant to see what resources will help you the most and make sure your business is a winner and not a loser.