Why it’s NOT essential for start-ups to rush things
The common misconception is that all start-up companies need to raise money fast, but in truth this is not always the case.
While having a lot of funding can help to stave off the effects of administration or possible liquidation, it can also prove to be a double-edged sword.
If it is readily available, it can alter decisions and lead to concepts and ideas being pushed through when they are not actually viable.
In these instances, taking a step back can help in the long-term and it doesn’t always need to involve vast sums of money.
There is more to business than money
The amount of funding is not generally a sign of success – it might show belief in an idea from a certain investor, but if the business plan is not tested then its outcomes are unknown.
In the cases of start-ups, many of the ideas are not tested so it is virtually impossible to say if they will be successful.
A startup could spend thousands of pounds developing an idea, but if it is not marketable, or scalable, then it probably won’t be successful.
This is just one of the issues that start-up companies face, but it could be disastrous in the long run, especially if the product is one on which the company is based – insolvency could become a possibility, before the start-up has even got going.
Getting the small things right
Growing a business in the early days requires a focus on the small aspects that can influence how things are done – throwing money at a problem is one thing, but it doesn’t guarantee a solution.
A successful business will be built on a suitable cashflow system that leads to profitability – whereby the business in question makes more money in sales than the costs required to produce and market its products.
Having money when it is not needed can encourage businesses to be wasteful, so instead it is better to take things slowly and ensure that the best products are available before going to market.
This goes hand in hand with ensuring that the staff are right for the company, as expensive staff with several skill sets are better than having more staff with less attributes.
In the fight to succeed as a start-up, grit and determination are needed in abundance, so maintaining passion for the concept is essential.
Taking things one step at a time is a great way to save funds and pour money into the areas of a business that need it most.
By Phil Smith