By Deepak Tailor, Founder of LatestFreeStuff .
For more and more people, becoming an entrepreneur is the ultimate career goal. Being your own boss. Building a thriving business from nothing. Being at the creative helm of your own enterprise. It’s deeply alluring. The problem is that reality too often gets in the way of aspiration. With 90% of startups failing, you can’t help but wonder where people are going wrong. As an entrepreneur myself, with some experience of the early rocky ground, I think that the biggest issue is that people aren’t always aware of the barriers that they may face. If you know what’s coming, then it’s easier to prepare for it, and if you’re prepared, then those trip hazards and hurdles are easier to jump over.
Cashflow is probably the greatest problem that every business has to face. Even the big, established brands can struggle – which is why, despite the UK being out of recession, we’re still seeing big high street names, such as Patisserie Valerie, Maplin and ToysRUs, facing administration or completely collapsing. The difficulty with cashflow is that you’re always reliant other people: you need your clients to pay their bills, so you can pay yours. And that doesn’t always happen, because your clients are usually in the same situation as you. Here, budgeting wisely, and planning well are really the only ways to keep the wolf from the door. Some experts recommend keeping savings to the value of 6 months’ worth of overheads to one side, to cover all eventualities. In the early days, you’re unlikely to be able to do that much. BUT, you can keep a small safety net. You can ask creditors to work on a slightly longer billing cycle – 45 days isn’t uncommon. You can ask for down payments, and you can implement a faster invoicing system.
2. You can’t do everything yourself
When I launched my business, Latestfreestuff.co.uk, I did so from my bedroom. I was the typical student entrepreneur – with an over-inflated opinion of my own capabilities. It was an online business, I didn’t need to do anything other than create the code and build the website, and source the deals, and write the copy, and sort the advertising, and handle the finances, and… I ended up making a lot of mistakes and doing a lot of things badly. If I’d sought help and delegated the things that I wasn’t very good at, the early days would have been easier. I realised my mistake before it was too late; I outsourced things that other people could do better; when I could afford it, I took on permanent staff; I made a successful business without burning out before the age of 25. But, it was a close-run thing.
Being an entrepreneur is really exciting, but it can also be really stressful. Cashflow alone is enough to make you lose sleep. Finding ways to handle stress positively is really important if you want to make it in the long term. For me, it’s going to the gym. One of my friends breathes away their stress with yoga. I know someone who surfs, someone bakes. You’ll have your own way to deal with stress, but whatever it is, it’s really important that you use it.
4. Losing Focus
It’s so easy, in the early days of business, to become distracted. There are so many things going on around you, so many potential good ideas to grasp. But, if you grasp them all, you run the risk of failing because you’ll never complete what you first set out to achieve. Of course, some flexibility is important; you need to be able to adjust and respond to your business environment; but you also need to get things done. Keeping an eye on the bigger picture and the reasons why you started in the first place, will both keep you on track and keep you motivated.
5. Finding Customers and Marketing
Even the best product in the world will fail if it doesn’t reach the attention of the right audience. And marketing is harder than you might think. While social media has, admittedly, made it easier to get messages seen by huge numbers of people, it only helps if they’re the right types of people for your brands. To succeed, you need to maximise your ROI by creating a strong brand identity, building comprehensive marketing strategy, testing that strategy – and being prepared to outsource these tasks to someone better prepared to handle them. If you lack the budget for a big PR firm, look to freelancers. It’s one of the most important investments you’ll make.