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The smart way to set up your business
By Neil Petch, chairman of Virtuzone, one of the most dynamic and fastest-growing company set-up operators in the region.
November 28, 2013 3:56 by kippreport
We hear it all the time: More than 90 per cent of new businesses fail within the first year of operation. Nearly 50 per cent don’t survive past the second year. This is certainly a bleak prognosis, but it also begs the question: What do those who succeed do differently?
Well, as much as we would like to simplify things, there’s no single recipe for success, especially when it comes to small businesses and start-ups. However, there’s a commonality that all of them have – finding smart ways to get things done and making things work to their advantage in most situations.
Every business starts with an idea, passion or an ambition and, no doubt, all business owners are committed to succeeding, working hard and being industrious in their own way. However, sadly and quite frequently, many don’t get past the idea stage due to inadequate planning and approach.
If you’re going to start a business, there are things you need to know in order to maximise your chances of success and longevity. Educating yourself about the right way to go about starting your business is an essential step that, believe or not (but you better believe it), will set you apart from the rest and ensure that your business will endure.
Know your start-up costs. When setting up a business, it’s imperative to limit your start-up costs. Otherwise, you’ll run out of hard-earned money before run your business.
You’ll find it reassuring to know that there are affordable options for start-ups and small businesses –you need not look too far. All it takes is an appointment with a specialist who can understand what your needs are and lay out the best options for your business registration and license requirements, which, in the short run, could minimise your start-up costs considerably, but, in the long run, they can offer you the best platform to scale up your business.
At Virtuzone we come across optimistic and intrepid entrepreneurs each day, who can’t wait to get their businesses up and running. They are also utterly relieved to find out about the flexible and cost-effective set-up options that they have at their disposal, and to know that they don’t need to worry about carrying out the process on their own or taking care of all of the paperwork involved.
Know the real risks of running a business. Starting and running a business is not for the faint-hearted. No matter how easy and tempting some successful entrepreneurs make it look. It will take over your life and, for a while, it will feel for most of the time that, despite your best efforts, you’re struggling to stay afloat. Prepare for the work-outcome rapport to be rather unbalanced. There’s no immediate fulfillment, no instant gratification.
If you’re thinking of running a business as a formalised hobby, you’ll be in for a shock. So, it’s important to consider some of the initial risks and concerns before beginning your venture.
Let’s face the sobering facts. Nobody likes losing money, especially when a business is supposed to generate money. In fact, being jobless is probably a better alternative to bleeding cash. As for the much-awaited ‘breaking even’ stage, that might be another one to two years in the making.
So, this is the real risk – the inability to outlast financially your development stages, the possibility that it may be over before it even started and the harsh reality that there are no do-overs.
What do you do about it? You set financial boundaries – hard limits, if you like – for yourself as far as the business is concerned. You need to ask yourself how much money you are ready to put in and ready to lose from running your business. Once you know the answer, you need to be ready to walk away if and when you hit your limits.
There is no single recipe for how to create a financially sound business. However, knowing how far you can stretch out is paramount to any business endeavor. In the end, you need to be smart about it.