Over 750,000 new businesses were set up in the UK between March 2021 and March 2022. Figures suggest that the failure rate for new businesses is around 60% within the first year. That is over half of the new companies not even making it past their first year of operations.
There are many reasons why a business might not survive the first 12 months, and while some of these obstacles can be avoided, many can. Be it through neglect, inexperience, or a lack of knowledge, failing to know what you are getting into when starting a new business can put an end to your entrepreneurial dreams before they’ve even begun.
Read on to find out what things you need to consider when starting a new business.
Not only does your business need physical security solutions, but it also needs digital security too. Cybercrime is on the rise and shows no signs of stopping, And if you think that, as a small business, you will have nothing cybercriminals will want, you are sorely mistaken. You must work towards Zero Trust for your infrastructure to ensure you are locked down and secure from threats from day one.
Putting effective measures in place to protect your premise, if applicable, means securing doors and windows, using security alarms, security lighting, and physical security guards, and alarms. Digital security means knowing how to stay safe online and educating yourself and your employees on the dangers of phishing emails, not using secure passwords, and logging on to public networks where others can access your information at a minimum.
While some businesses can operate on little to no budget and build up funds and cash flow as they go, others need to ensure they have funds ready to ensure cash flow is fluid when required. A lack of cash flow is one of the main reasons businesses fold within the first year, and this can be avoided in many cases. Ideally, you will have a minimum of three to six months’ worth of operating expenses to hand to fall back on. You will need to be proactive in your forecasting to help you track payments and expenses to help you adapt your operations to account for changes in the market and consumer habits, for example, to give you a better chance of longevity.
Marketing is often considered an added bonus for many businesses, but nowadays, you cannot afford to have a marketing budget. Your marketing budget should be around 3% of your projected profits to help you advertise your business and what you do. At a minimum, using social media correctly for businesses is vital to help you reach out to customers and get the word out about your business, who you are, and what you are. Other options include investing in SEO, content marketing, PPC, physical marketing, media marketing, and more, depending on your business and your target audience.
When starting a new business, try not to rush into things and begin trading before you are ready. Do your research on the common issues new businesses face so you can start off aware of the challenges you might face and how to navigate them to give your new venture the best chance of success.