Starting a new business is always exciting and will be one of the most important things that many people do in their lives. However the fail rate for new companies is staggeringly high. The line between success and bankruptcy is often very narrow but there are a number of critical success factors you can look out for when you are starting out with your new endeavour.
Hiring the right staff
A big step in any new business is hiring people when it starts to grow. It’s not as straightforward as many people believe. Employing people that are not a good fit for the organisation can potentially bring the whole thing crashing down. Careful consideration needs to be taken when interviewing for candidates. The best way of mitigating this risk is to use one of the leading background checking companies to perform background checks. You also have to make absolutely sure that potential employees have the right to work in the UK. This is for your own piece of mind as well as staying on the right side of the law.
There are other checks that can be carried out on potential employees, but this will depend on the role you are recruiting for. Understanding a candidate’s credit history can be useful if you’re assessing their suitability for a position working with money or secure information. This is becoming more and more common as part of a job application, and if any candidates are concerned about what such a check might show, they can carry out a free credit check with any of the major online providers, which will help them understand their credit scores and what a potential employer might see.
We all know that marketing is essential for growth in any organisation, especially new businesses. But how much should you spend? A good place to start with is social media. Although not completely free if you take into consideration the required time you have to put in to do it properly, it is free from a monetary perspective. If you do decide to invest funds in marketing, a good guideline is to spend about fifteen percent of your target revenue. It can be a scary prospect to put down that first payment towards marketing but it is an absolute necessity.
As a new business owner you will need to exercise control over many aspects. Control over spending, control over organisation and employee performance, control in business direction, and so forth. It’s important to come to grips with this and it takes planning to exercise appropriate control. Too much control and you risk creating a rigid and unyielding environment that stifles growth. Not enough control and the opposite is true: the business might run itself into the ground. It’s important to have a defined business plan and steer the organisation in that direction through balanced control.
Any new business will struggle to move forward without a decent budget. It’s not just necessary to keep track of your revenue and expenditure but also to identify future growth and investment opportunities. It gives you direction and provides you with a standard against which you can compare company performance. A budget can also be used as motivational tool, by incentivising staff to reach certain budgetary targets and rewarding them accordingly.
Listen to your customers
It can be very easy to lose focus and direction when starting a new business. There are a million things that are fighting for your attention all at the same time. However, you need to prioritize your client’s needs. You can’t assume that it will always stay the same and it’s important that your business evolves with them. After all, without clients, no organisation can exist. Make sure you listen to what their problems are and in what capacity you can assist them.
It’s crucial to give your new business a solid platform on which to build future success as it can be very susceptible to change and external factors. Keep these areas in mind for the best chance of survival, a little hard work and planning will give you that all important competitive edge!