I was recently asked what I thought were the five most important things a business should not do.
In no particular order they are:
- Don’t be over optimistic
I generally find that businesses overestimate their income and underestimate their expenses which effects their profitability and cash flow which allied to overestimating the speed of cash inflows can create cash flow problems. The advice here is to be realistic as possible and also do planning for various assumptions/scenarios.
- Don’t ignore your continuing education
It is essential that you continue to invest in your knowledge base by reading relevant and recommended business books, attending courses together with keeping up to date on the latest trends and technology in your industry. You can only be a continuing expert in your industry by creating a strong educational environment for yourself.
- Don’t ignore advisors
Surround yourself with professional advisors, mentors, friends and peers who can advise and guide you. Their experiences and assistance can be invaluable. This can be a reciprocal arrangement as they can also learn from you. Remember you don’t know everything and can’t put a wise head on young shoulders.
- Don’t under capitalise your business
Many business startups underestimate the capital that is required to run a business successfully. It is vitally important that you start with the proper capital base, if you can, as it should lessen financial firefighting.
- Don’t under invest in staff
In the first instance you should, when you can, hire the best people available. They are the people who probably keep your business going and may be more of a public face in your business then you are. Make sure they are will trained and also undertake a continuing education programme. This is probably the best investment you can make.
Have you any suggestions which we can put in our next newsletter?