by Derek O'Dwyer
http://www.havingthebestday.com?t=a8
©
2009
You're up an running, everyone is wishing you well,
all your friends promise to buy from you every day, you have fired your boss,
your doors are open and this is the brilliant start to the rest of your life...
You
enthusiastically launch into your new business and approach it with energy and
vigor for the next few weeks. Like every new business, you are gung ho, dealing
with inquiries, orders, deliveries and ordering supplies.
Then
suddenly your bank manager calls you to say that you are running out of money
on the same day that your supplier calls you looking for cash. Yikes!
So
where has all the money gone?
How to get your business working
from day one really involves the implementation of a set of checks and balances
from the outset to ensure that your business actually follows the plan that you
poured over for the bank initially.
Here are a few guidelines
that you need to follow:
- Prepare a simple budget with all your projected
outgoings included including payments for tax and employee related charges. Also
include your projected payments to suppliers based on the credit terms that they
gave you. Find out as much as you can about "the cash gap" and ensure
that you have the funds to support yours.
- Prepare a daily and weekly
cashflow tracker for your business and either complete it daily yourself or delegate
it to someone who will complete it for you. Either way, you must inspect it and
understand each and every number on there.
- Always have a set of key performance
indicators for your business - list for your business which will track the level
of activity that you are doing and how well you are doing it.
This
is vitally important. i.e you may think you are busy doing 10 transactions per
day at 100 dollars each but your earlier budget may has established that you need
to do 1200 per day just to break even.
If you are not making
the required number of transactions required to break even, then you must make
positive changes in your business to ensure your success.
Not
having a basic understanding of the numbers in your business is probably the biggest
downfall for many budding entrepreneurs. Take a course if you have to.
Very
often when the numbers are not being understood they are ignored which only serves
to compound the issue and no one wants to receive the call from the bank manager.
Many
small business fail because of burnout and the majority of this stems from a poor
understanding of the basic fundamentals of business from the outset.
This
alone can put people off and thats why many people choose to get into a business
where the majority of this work is already done for you and you just have to follow
a system. Many offline systems are franchises. Online line you also get similar
options.
