Whether you are researching before starting your dream company or are in the midst of your second year of business, there is one thing to be mindful about, 90 % of startups fail. If your company wants to be apart of the 10% that succeed, continue reading how to overcome the three most common problems for start-up businesses.
1. Business Model
Sure your business can be generating a fair amount of revenue, but what often gets overlooked are the accumulated expenses and expenditures. If your business model produces x amount of profit, but its costs to run are higher than profit, you will ultimately not be able to operate your business for the long-run, or generate income.
Keep overhead costs, utilities, debt, and record-keeping in mind when operating your business, and calculate these values on a monthly basis. Utilize the plenty of free resources out on the internet to assist you in managing your budgeting, and help your business reach cash flow positive.
Often in your first couple years of business, your focus is on the internal matters. However, it is absolutely crucial to pay attention to the many players, changes, and trends in your market.
If you want to learn strategies about staying ahead of your competitors, read our past blog. The key takeaway? Make sure your business has at least one factor that differentiates itself in your market, or else your company will likely fade among its competition.
3. Too Little Financing
The idea of tackling on a lease or debt may seem intimidating as a small business owner. Navigating your way through the financial world and deceptive broker fees can feel overwhelming.
In order to make money, you need to spend money. A decision to not utilize financing for your business and its equipment can seriously restrict your company’s capacity to expand, and limit the potential revenue it could be making.
Meet with your account to discuss all different methods of financing, and consider the benefits of working with a direct lender.