Starting a new business is exciting, stressful, and most of all, a lot of work. But if you’ve got a fresh idea, identified a gap in the market, or just want to improve upon a current business strategy, you need to consider some of the things that often go wrong in new businesses.
To give you an idea, according to BLS around 20% of businesses fail within 2 years, 45% stop operations after 5 years, and 65% during the first 10 years. There are many factors that can contribute to business failure, so you need to be as careful as possible when you’re doing your business operations.
You should make sure to put any possible protection in place to protect your business and prevent business nightmares from taking down your company.
The BLS statistics may look scary, however, there are precautions to put in place to avoid new business nightmares. No matter the cost, you need to invest in these precautions, to prevent your business from becoming a statistic.
Business owners who take precautions and protect their businesses are much more likely to have a successful business after 5 years than those who neglect to do so. Here are 5 new business nightmares that you might not have considered, and how you can avoid them.
5 New Business Nightmares & How to Avoid Them
Contracts & Financial Tools
Most new entrepreneurs have an idea and the means to get it going, but there’s more to running a business. Making sure your B2B contracts and employee contracts are above board and finding the right financial tools are key to keeping everything running smoothly.
Unforeseen taxes and costs are nightmares that aid many business owners in losing control. A financial agency or a business accountant can help you understand your profit margins, outgoings, and everything in between to keep your business thriving.
Investment
Researching investment options is essential to any new business. Looking for government loan schemes, silent partners, and other entrepreneurs can help your initial growth and keep you running during the early stages of your business.
Many businesses protect their business finances by making careful investments, and having a diverse business portfolio is one of the best things you can do to protect your company.
This is a really important step in starting a new business and the nightmare comes from picking the wrong investment. Some contracts, it can include a change in ownership if payments aren’t made promptly.
There are all different types of investments that you can make in your business. For example, many businesses invest in traditional investments such as stocks, bonds, and cash.
However, alternative investments such as real estate, commodities, collectibles, and hedge funds may also be a good idea, depending on your business. Many businesses recommend cultivating an investment portfolio with both traditional and alternative investments, so you can better protect your business.
Marketing
Marketing needs to start from day one. A lot of businesses wait or put little effort into their marketing until they start performing well. As a small business, there are plenty of ways to market your business for free.
Take advantage of social media platforms, ask your customers/ clients to leave you a review, and work with other businesses in your industry to help recommend other brands to work with you. You can have the best idea in the world, or have the best value for money service, but if people can’t find you, it makes it all so much harder.
The main two types of marketing you need to consider are search engine marketing, and social media marketing. More than half of the world has the internet and social media profiles – it is now incredibly important when it comes to marketing your business and attracting attention.
You should also make sure that your branding is consistent across all of your social media profiles when you’re communicating with clients and customers, so you are more memorable online.
You might want to consult a social media and search engine marketing agency for help with your marketing plan, as they will be well-versed in helping businesses like yours.
Freelancers
Employing new people to a business costs a lot, and can come with complications. Additional taxes, holidays, and absences all need to be considered if you have a small team.
When it comes to using freelancers, you might be paying a little more on a day-to-day basis, but what you don’t pay for is holidays, insurance, and everything else that comes with full-time employment. Depending on what your business is, there’s likely a freelancer who can help you, have a browse on LinkedIn to find out who can help you and for what price.
Insurance
Insurance always seems very straightforward, you protect your business from unforeseen circumstances to assure you’re compensated if there’s a crisis.
Protecting your employees, premises, and assets is fairly obvious to state, however, you should also consider additional insurance depending on your business. Export credit insurance is an example, say you work with a business that receives a product or service from you and they’re unable to pay, you need to be covered so you can receive payment.
Sometimes you’ll be covered through the government but this can take a long time to process and most new businesses survive month to month. Finding a good credit insurance broker can give you peace of mind if you’re working with other new businesses that may not be trusted yet.
When you take the steps to protect your business, you are only setting yourself up for further success. With the modern economy being as unpredictable as it currently is, you need to have a belt-and-braces approach when it comes to protecting your business. Businesses that are protected from the get-go have a much better success rate and a higher likelihood of success.
Considering all of these nightmare possibilities when creating your business protection plan will help you be prepared for any situation. Start making a business protection plan today for the best possible outcome!