6 start-up survival tips to help your business succeed this year
With more than half of new British businesses not lasting beyond five years, find out how to give your start-up the best chance of going the distance...
Last year, a record-breaking 581,000 new businesses registered with Companies House. And with a quarter of UK adults reporting that they would like to start a new business in 2016, this year is set to be another massive year for start-ups.
However, while start-up aspirations are higher than ever, more than half of new British businesses don’t survive beyond five years. So what’s the key to longevity? Give your business the best chance of success by following these top start-up survival tips from Cloud Accountant.
1. Put in the research to find your niche
Most businesses fail because they provide something that’s already been done, or they offer something that nobody wants. Perform secondary research until you find a gap in the market. Then, once you have your niche, get out there and find out if there is actually an appetite for your idea.
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2. Build a support network
Having a network to fall back on is absolutely vital, particularly when things begin to get tough. Your network should include experienced entrepreneurs, who’ve been through it all before, as well as your start-up peers who are also trying to get their businesses off the ground.
Your contact book should also include the numbers of professionals like lawyers and accountants that will offer you basic advice without the premium price tag.
3. Keep on top of your accounts from day one
To keep a close eye on your business you need to know where you are financially at any point in time. Modern Cloud-based accountancy systems link in to your bank feed meaning you can see a snapshot of your business health at any point in time through your computer or mobile device.
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This makes important decision making easier and allows you to ensure you are on track with your forecasts. Keeping everything up to date is simple through modern software and the rewards in having up to date financial information at your fingertips cannot be overstated.
4. Know exactly how you’re doing, how much cash you have and who needs paying
Once you are up to date with your accounts you can manage the most important aspect for any business – cashflow. A business can make £10,000 of profit in a month but if the customers aren’t paying then the cashflow will bring the company down.
Using cloud based accountancy systems not only can you invoice the client as soon as the work is complete but you can automate chasers and create alerts for any invoice that is approaching your credit terms.
5. Make the most of funding and tax incentives
Knowing what funding is available to you is important if you are to survive and thrive in the first few years of trading. Some funding programmes like the Business Growth Service have closed recently, but there are still a number of grants, loans and training schemes open to start-ups.
Start-ups should also be aware of tax incentives like the ability to claim relief on travel and subsistence expenses.
6. Keep set-up costs low with cloud technology
Thanks to cloud technology, the fantasy of starting a business on a shoestring budget has become reality. Start-ups no longer face huge upfront costs for things like administration and finance software. Instead they can just ‘rent’ this software through the cloud for a small monthly fee.
Cloud-based software packages can be scaled up or down at a moment’s notice giving start-ups the flexibility they need to respond to opportunities and threats.