|By Antonio Litterio|
Today’s blog has been provoked by a case I saw online yesterday. It has implications for everyone – not just writers – who trades in either goods or services, whether on line or through stores.
1. FACE WHAT ISN’T WORKING: Thousands of people start businesses on their kitchen tables, with a little know-how and less money. That’s the good news: the bad news is, most of them never get any further than that. Of the small businesses that actually get off the ground, one in three will fail in their first three years. (Quoted from The Times 100 Business Case Studies). While that means two-thirds survive, there’s a big difference between surviving, and being a success. Yes, sayings such as: “Somebody who never made a mistake never made anything”and “Fall down six times, get up seven” are the mottoes of true entrepreneurs, but there are limits. Sensible people find out what those limits are, before investing too much time or money.
If you have a dream, do the research, get professional advice, make a business plan then get out there and try to make it a reality. If you complain that’ll take too long and cost too much, think again. Would you rather spend a large amount on qualified, professional help now, or a vast fortune on legal teams and penalty fees later, when things go wrong? It’s painful, but think of it as insurance. Talking of which…
2. ALWAYS ANTICIPATE TROUBLE: before you make any moves toward starting your own business, have a Plan B for every eventuality, and a fighting fund of at least three months’ salary, and preferably a lot more. How would you manage if world events meant demand for your product fell off a cliff? Remember the horse-meat scandal. Big food producers have contingency plans, multiple streams of income and staff employed specifically to firefight bad publicity like that. If your start-up business produced only tiny quantities of the finest hand-made beef lasagne, you’d have been be floored. In cases like that, mud sticks to the innocent as well as the guilty.
If roadworks, floods or bad publicity turned your customers away, how long could you last? What would happen if you couldn’t work through illness, divorce, or other catastrophe? Sudden changes in your childcare arrangements, or the need to become a carer for a partner or parent? These things happen, and more often than you might think. Make sure you have adequate insurance.
Have a proper business account, keep detailed records and never, never, never dip into it to pay personal bills. Whenever and whatever monies you get paid, immediately put at least half into a separate account and don’t touch it. At all. That’s to pay your tax, and other dues. Fifty percent seems high, but once all your bills have been paid any excess can go toward the fees of a good accountant. Financial help can save you money in the long run, and best of all, they’ll keep you on the right side of the tax people. You definitely do not want to fall foul of them.