Starting your own business is stressful as it is, however, you can always look up to others, those with previous experience, for guidance on the subject matter. The problem is that the majority of guides focuses on the basics of starting a business (validating ideas, writing a business plan, registering a business). Because of this, they fail to dedicate enough attention to some of the biggest challenges that your company is bound to face. In order to avoid this mistake, here are the top eight things you need to know before starting a business.
1 Be careful with your cash
One of the things that a lot of first-time entrepreneurs get wrong is believing that money is a resource, rather than a group of similar, yet, essentially different assets. For instance, your account receivables and your cash income are not one and the same thing. Just because you have money on paper, this doesn’t mean that you could use these assets to pay your suppliers, your staff or settle your office lease and utilities. Therefore, managing your cash flow needs to become your first priority.
2 Pick the right business partner
In a scenario where you can’t start your enterprise on your own but need a partner instead, you need to ensure that you find the right person for the job. First of all, you need someone with the same idea, the same vision as you have. Just picking a person based on mutual interests is not a good idea. Second, you need someone that you have great communication with. Finally, you need to have it all in writing, as well as a partnership dissolution plan, well ahead of time.
3 Work with people you trust
We’re not just talking about people in whose abilities you trust, we’re talking about people in whose competence and experience you have full confidence. When it comes to assembling the right staff, it’s not enough just to look at their resume or properly interview them. You also need to see their competence and dedication first-hand. It’s outright irresponsible to delegate important tasks to your staff members before you battle-test them.
4 Laws of productivity
The concept of an individual’s productivity is sometimes quite hard to understand and precisely pinpoint. However, when it comes to your collective staff, there are two laws of productivity that you need to closely monitor and even turn into your own advantage. First, you have the Price’s law which claims that about half of all the work in your office is done by a tiny fraction of your staff members. The second one is Parkinson’s law of productivity which claims that the amount of work gets distributed to fill in space until the deadline.
5 Choose your battles
The next thing you need to understand is the fact that you just can’t do it all on your own. Even if you did have a good will to try, you simply aren’t equally as efficient in every area. This means that it would take you twice or three times the time to complete the same task (as if you were to entrust it to a specialist), as well as that the end result wouldn’t be the same. Therefore, you need to know when to step down and outsource instead of trying to handle absolutely everything in-house.
6 Understand your capacities
One of the things that people often make a mistake with is making a promise that they can’t keep. This always lies in the fact that they don’t know their capacities, which makes them either overestimate or underestimate their own business. Most commonly, this is the issue with the logistics like your production capacity or your distribution system. Fortunately, as we’ve already mentioned, this is something that can easily be outsourced to specialists. By teaming up with reputable logistical distribution services, you can streamline this process to your own benefit quite effortlessly.
7 Some people are just bad for your business
The next thing you need to understand is the fact that there are some employees who, although perform admirably on paper, tend to make your organization less effective, as a whole. For instance, an emotional vampire might perform admirably and always deliver their assignments on time, however, they elevate the stress levels in the office, thus making everyone else to underperform. A siren is even a popular person in the office, one that makes their coworkers feel good about themselves and raises morale. Still, they’re too distracting to be around.
8 Don’t burn out
One of the most important things that you need to take into consideration is the fact that you, as a human being, have your own stamina and mental endurance to worry about. There are only so many extra hours that you can work overtime and there are only so many tasks that you can handle at once. Even if you were possible to push yourself to the limits, for how long would you be able to withstand this regiment before falling apart? What effect would this have on your private life? Would the end result be worth it?
At the end of the day, the challenges you meet may also be industry- or situation-specific, in which case you’ll have to adjust as you go. As far as the above-listed eight challenges go, they will be, more or less, universally present as soon as you start running and growing your business. Being ready for these challenges ahead of time can help increase your odds in the business world.
Also published on Medium.