Why businesses must plan for the long-term
Half of UK start-up companies still fail to pass the five year hurdle, showcasing the need for clearly defined plans and business goals.
Many firms face issues in their early days but most can be overcome – IT and computer problems can be fixed and poor pricing plans can be altered, for example.
Of vital importance is the need to plan ahead, recognising target markets and opportunities while putting strategies in place to exploit them.
Having a sound knowledge of finances and those that are available is essential, as this will ultimately aid any long-term planning.
A business should not set up by focusing on just the initial months, but on one or two years ahead, helping to ensure that the essential aspects of creating a business are done properly.
Should a product or service be successful then expansion could happen very rapidly, but this requires the right foundations, all of which are laid in the initial years following a company’s formation.
Recognising essential operating costs is just the start, as these often require a considerable chunk of available finances.
A start-up business should start with the basics before branching out, as this allows for steady and progressive expansion.
Having clear plans ensures that a business works towards targets, looking to achieve one thing before moving onto another.
This enables finances to be managed effectively and reduces the likelihood of a company having to declare itself insolvent within a limited time of being created.
Advice regarding business recovery should also be sought at the earliest possible stage if it becomes clear that a firm might be facing financial trouble.
Taking such an approach ensures there is sufficient time for a company to be assessed and for suitable solutions to be found.
By looking to the long-term future of a business, its owners can create strategies that they believe will deliver longevity and success.
A failure to take such an approach could place a business under unnecessary financial strain early on, a situation that should be avoided where possible.
By Phil Smith