Key mistakes that all SMEs should avoid
When you start a new business there are any number of potential pitfalls that it could fall into during the early stages. Avoiding these could go a long way towards how successful (or otherwise) your venture is and how competitive it can be.
So, what are the common problems that businesses face and how can they prepare effectively?
Not requesting expert advice
All businesses, even the largest, require external advice at some point or another. This is especially true of small and medium sized businesses, most of which probably won’t have staff with the depth of experience or breadth of knowledge necessary to make informed decisions at every step. Consequently, it’s important that advice is sought and taken from business recovery professionals that deal with the precise problems the business is facing.
Poor cash-flow planning
In times of financial hardship, particularly if a company is struggling, one of the greatest threats to a business is the freezing up of its cash flow. Without funds flowing freely into the business, through every part of it and out of the other side, the business will remain stagnant and unhealthy. Consequently, it is important to ensure that comprehensive cash flow planning is in place, giving companies the opportunity to understand exactly what is happening with its cash.
Failing to act quickly
All large problems begin as small ones and a crisis is often caused by an inability to deal with these small issues before they snowball. It’s incredibly important that any small or medium-sized business establishes a system which allows them to identify problems at an early stage, in order to make sure they are dealt with at the source and aren’t left to fester. In most cases, problems will originate in a specific part of the business and will, for a small period of time, remain localised.
By Phil Smith