Avoid Traps in Business

You have just started your new business; your dream and idea has started! Everything looks good but boom! Everything crashed! Unexpected things can happen and often they happen just because you are not prepared. Learning from other people’s mistakes is no cliché, it´s a qualification for starting your own business and to survive the first period. It is not unusual for new businesses to crash within the first year. A recent survey in Britain by an insurance company shows that half of all new businesses don´t survive their first five years.

Business plan – The first rule

You might be wondering about why you need a business plan since your company is so small. Stop thinking, the business plan is the foundation in all companies. If you don’t have a well worked out business plan, you won’t succeed. Many businesses end because of a bad business plan. It is important to have set goals and to focus on them. Besides this you need to figure out the time aspects and part goals of your business. How far do you want to come, and when do you want to be there? You need a strategy on goals, competition, market prognosis and how to finance it – all has to be there from the start. By putting this on to paper, in text, you have the means to hold the course through good and bad times. You can make analyses by looking back at the business plan when something goes right, or wrong, and learn lessons from it.

Not all eggs in the same basket

As the owner of a business it is easy to have all the responsibility and knowledge yourself. This is of course good, to have all the knowledge and details, but by putting all eggs in the same basket the company is also very vulnerable. It is crucial to have a good network of partners and people around you that you can trust and rely on in cases of need. If you are in an accident or get sick, it can be devastating to the business if no one has information and knowledge on how to run it. If there are employees in the business, they should have access to key information, for example contacts to clients, financiers, or other important people. Write down all the important information somewhere and tell those who should know where to find it.

Planning ahead!

It is easy to fall in the trap when everything is good in the business. It can be really hard to make time for future plans when right now is going exactly as you want. The production goes on as planned but what happens if the market makes a turn? If you don´t have a long-term plan you can overturn your business very fast, this is a very common reason for companies going under. Incident in the short term demands a more detailed plan that takes time to make, while long term events don’t need that many details. Most importantly, you need a rough plan for upcoming events and incidents to give to all those involved.

Keeping focus

Always keep your main idea in focus! It can be easy, when your company is going well, to be lured into possibilities outside your alignment. It is important to evaluate these opportunities before you make any commitments. You can miss something important, but as long as you keep focusing on your main idea your company will keep your vision and go forward and keep being profitable. In the end, everything falls back on to the business plan!