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This is everything you need to know before starting your own business

Starting your own business is an incredibly exciting moment, but it is fraught with challenges. Given the difficulty in ever predicting how successful your business will become, or the nature of the hurdles you will face, starting a company is a giant leap into the unknown.

As a result, it is imperative that you learn as much as possible about how to run a successful business before attempting to do it for real. This is because start-ups are like newborn babies – incredibly fragile and in need of around-the-clock care. If you make a mistake or drop the ball, you will be punished heavily for it.

You certainly can’t learn how to be successful in business from a book because there is no way to truly prepare for the intense stresses of corporate life until you experience it for real – but there are common trends and pitfalls that you can learn to recognize before they happen to you.

This is everything you need to know before starting your own business:

Cash flow is king

One of the most common destroyers of otherwise strong businesses is a lack of healthy cash flow.

As the name suggests, cash flow is the flow of money through your company – from a customer buying a product to you paying your overheads and (hopefully) taking a cut of the profit.

Think of cash flow as the blood that courses through the veins of an enterprise, feeding each department and ensuring that the health of the business is maintained.

Many business leaders make the mistake of believing that because they generate a healthy amount of money from sales in one month, then it will counteract the fact that the next two months are quiet.

These boom-and-bust business models are dangerous because you are more likely to be caught short financially. You never know how long you might go without a sale, so you can’t rely on savings to pay your overheads.

Instead, you need to try and find ways to increase cash flow. This might mean sacrificing the spectacular highs in order to minimize the barren lows, but it will reward you with vital financial stability. 

Keep your business model as simple as possible

Another great tip to remember if you are about to start your own company is to keep your business model as simple as possible.

It can be easy for budding entrepreneurs to get ahead of themselves and start to build castles in the sky. Once they have settled on a particular business idea, they will try to be clever by thinking of ways to build on it with other products, services or marketing strategies.

Although thinking of new ideas is a healthy (and necessary) instinct for business owners, you should remember to keep it simple while you are just starting out. 

Design an initial business model which requires the least amount of planning, resources, staff and other headaches. You will want to minimize the chances of you becoming overwhelmed by work and stress, so don’t make the challenge harder than it needs to be.

As a bonus, having a simple business model helps you to focus on the details that matter – quality control, class-leading products and services, great customer service and an eye-catching marketing campaign. Once these key elements are nailed, you can start to move on to a more complex model.

Have a core message that is easily understandable

A stern challenge that every newly formed enterprise faces is how to attract the attention of its target market.  

This is no easy feat because the market will likely already be saturated by other brands offering similar products. You will have to find a way to demonstrate why your business is different, and why skeptical customers should invest their hard-earned money with your start-up.

A great way of achieving this quickly is to work to your strengths (and the weaknesses of larger, more established competitors). This means injecting your brand with your own personality and worldview, highlighting that your limited product range means you focus on making your products the best they can be and that you can adopt a less corporate marketing tone of voice than the rest of the market.

There are countless examples of small brands that disrupted their industries by taking direct aim at their competitors’ weaknesses – so don’t be put off that you lack the might of your rivals.

A key element of establishing yourself in the market is having a core message that is easily understandable. If no one can work out what you offer within a few seconds, then they are unlikely to ever take you seriously.

Instead, make it abundantly clear what you sell and why a prospect should care.

Don’t try and change the world all at once

It is an admirable quality that many entrepreneurs possess but trying to revolutionize your industry in one fell swoop is only going to end in frustration. 

The world doesn’t revolve around your brand, and it will take time to get your name out into the market, let alone make a lasting change to it.

Instead of overreaching, forget about the industry at large and focus on perfecting the smaller details. Take care of the design and production of your products, their delivery and presentation, and the efficiency of your internal infrastructure. 

The more you focus on optimizing every area of your business, the higher the chance that you do make waves in your industry.

Create a plan and stick to it

Starting a business is incredibly daunting, and the scale of the challenge can leave you fixed to the spot, unable to put one foot in front of another and make progress.

To help you to keep moving in the right direction, ensure that you have a clear plan of action. This should contain the tasks that need to be completed in order to launch your company and should be as detailed as possible.

When you have a plan for the first few months of your company, you will have a target to aim at, distracting you from the noise around you. 

Related: How to Start a Business? A step by step guide for beginners…

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