The Mentoring Factor

Start – Before You Begin Your New Business

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The pre start-up phase could be the most important time of your business life. You’d be surprised at the number of prospective businesses decide on the legal status of their venture, open bank accounts, rent premises BEFORE they have done the necessary research and determined whether their idea makes financial sense and importantly after the initial set-up, whether they have created a viable commercial proposition.

These days, online service operations offer the cheapest set-up options with minimal overheads. If run from home there’s no business rates, no rental costs, no premises running costs like maintenance and extra utility bills. Keeping costs as low as possible is so important, especially as you can bet that unexpected and unplanned for costs suddenly crop up.

I was talking to a firm of accountants, DLR Accountants in Colchester, and they hold a refreshing view on new business start-ups. They provide the usual range of advice for small businesses but they act as business advisors too, providing guidance before people commit themselves before they’ve had the chance to really think things through. For them the most important trading indicator is cash flow in the first 18 months. This involves managing the flows of newly created money coming into the bank, and checking on any toxic flow away from the business. The thinking being that if you’ve managed to manage this essential lifeblood of the business in the early stages, you’ll have a better chance of making it to 2 years and beyond.

Start the way you mean to go on. Start by beginning to research, question and test your ideas before you box yourself into a corner that can be very costly.