Tricks to Keeping Your Startup Afloat
While there are many things that go into a startup, there are a few things that always get overlooked by entrepreneurs. In their zealousness to be in business for themselves, many people always do the things that they love and are comfortable with while missing some key steps to running a well-tuned organization.
This is the most overlooked issue with new businesses. I think that everyone realizes that there is some fiscal investment necessary in a new venture. The challenge is that it is quite possible to have a business that shows profitable on paper but could come up well short financially if the cash flow is not properly managed. As with everything else, it is challenging in the startup phase where you have no credit established and are being asked to extend credit to your customers. Your vendors expect to be paid in 7 to 10 days and yet if you have extended even 30 day terms you can find yourself cash strapped without a way out without a short term loan at a substantial interest rate from your bank.
Generally startups go and get the office building and the supplies and even start to engage with their close in customers. However, they never think far enough out to think about the marketing that will keep their business growing. This is why so many businesses stall and even fail in the first few years. I am by no means recommending that you spend all your time marketing but it clearly is a much better problem to be working on solutions to solve operational issues to increase capacity than it is to lose sleep over where you are going to find your next sales lead. Nothing is worse than having a company that is perfectly structured, processes in place and a staff with no work coming in the front door. Needless to say this will exacerbate your cash flow problems.
According to Webster’s, procrastination is defined as “to put off intentionally and habitually”. This can kill your organization. If even one member of your team procrastinates instead of jumping in and getting the work done, it can have a ripple effect on the rest of your staff. As your teams work to meet deadlines, everyone is working to a mutual schedule and even one individual who repeatedly misses deadlines can cause your entire organization to fall behind. Over a short period of time, your team will start to compensate for this individual, either building time in to the plan to help this individual out or by doing the work for this individual. The problem with this is that it enables the procrastinator and the problem starts to snow ball. This is one case where your team is only as strong as the weakest link. In a startup you don’t have a lot of runway to get the business off the ground. These individuals need to be quickly identified and then the situation needs to be addressed and they need to be trained to avoid these pitfalls. If they cannot adapt then change will become necessary. As painful as the change may be it will ultimately make the team stronger.
As in any startup, there will be a lot of naysayers. Everyone from your family to friends to your business associates will be quick to point out all the flaws in your business plan. While it is all with good intentions, most entrepreneurs compensate by being overly positive and many times missing the basics. While it seems obvious to everyone that you need to take care of your customers, as they are the ones paying the bills, you need to listen to your customers. Not just hear them. Your customers will tell you what you are doing right and wrong. And it is important that you not group them with the naysayers. They are different as they are coming to the table with the money that funds your business. Your goal is simple, how do you get more of their money. A word of caution though, customers tend to ask for the world, you just need to ensure that what you commit to is in line with your business plan and it is profitable.
If your employees are not happy, the rest doesn’t matter. Whether you realize it or not, your employees are the face of your company even if they never interface directly with the customer. Customers can tell when employees take pride in their work and it is very reflective of your company. Companies that have the best employee happiness tend to be highly sought after by both customers and applicants. This will generally allow you to increase your talent pool and strengthen you company overall.
If you and your company keep these things in the forefront of your mind, and revisit them on a regular basis, you will avoid many of the pitfalls that have taken down some great organizations.
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