Starting a company can be an exciting process, but it is also one that contains a number of risks, which can easily scupper even the best ideas. Although running your business is going to be a learning process, there are going to be some dangers that can permanently derail your operations.
So what are the common pitfalls that businesses experience? Here are three issues to stay on top of in your company:
Poor cash flow
One of the biggest reasons for companies to fail is they don't have enough cash flow. Infrequent or slow payments can have a big impact on the profitability of your company and can easily lead to insolvency if it is persistent.
To solve this, companies can turn to alternative payment methods like debtor finance. By assigning invoices to another company, firms can be sure they are going to achieve a regular cash flow that doesn't jeopardise their business's performance.
No business plan
Having a business plan in place is one of the most important steps for companies to take. It is also one that often gets forgotten as small business owners focus solely on immediate tasks, rather than their long-term development.
Taking the time to write down a realistic business plan that will guide your company's development is going to be essential. Not only can this step make it easier to understand what you want to achieve, it can also set your business up for future success.
Relying on a few customers
Having a few big clients or a niche customer base is a great way to start your business, but it can also leave you vulnerable to any changes in these markets. Instead, companies need to invest in marketing tools and appeal to a range of different customers in order to reduce the reliance on a small number of clients.
Making this change will not only allow you to grow your revenue, it can prevent you from losing money if a change occurs that impacts on your sales.
If your business needs any help with working capital management via a business line of credit, debtor financing or equipment financing, contact Earlypay’s helpful team today on 1300 760 205 or visit our sign-up form.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].