What new businesses need to be careful of early on
New businesses can be quite fragile as they might not have a huge amount of money or clients. A few mistakes can lead this type of business to close down or impede its growth for months. Do not make too many quick decisions but rather think out decisions that will have an impact on your company in the future. A proactive approach about making the right decisions could involve consulting a mentor or staff at the business to see what they think is best. The following are things that you need to avoid when you are running a business in its infancy.
Spending Carelessly
Spending carelessly seems to be a problem for many businesses just starting out. The Money Alert recommends spending in areas that need to be taken care of then immediately start spending to help increase revenue. Money spent on scaling and optimizing processes allows a business to take on large problems without too many growing pains. Set out a realistic spending budget for the first couple of months to make sure that there are no cash flow issues in the future. Set aside extra money monthly just in case a large client leaves or a client is having issues/is refusing to pay.
Hiring Friends or Family
The one thing that many people get trapped into doing is that of hiring friends or family when starting a new business. This is great if these people understand that you are the boss rather than a friend/family member. While things can still be the same on a personal level you cannot tolerate any form of disrespect or being talked down to by one of your employees. Failure to establish these boundaries can lead to other employees talking to you this way. Reprimanding one member of the staff but not another can be seen as a form of discrimination as everyone needs to be held to the same standard. If you have trouble establishing the rules with those in your personal life then skip hiring these people completely.
Renting or Buying A Bigger Office Space Than Necessary
There are so many businesses that can be run out of a home currently due to advances in technology. Certain businesses can be run just by having a computer and an internet connection. Do not rent out an office space for what the predicted staff will need but rather what the current staff needs. This will help reduce spending and allow a company to hire slowly and fire quickly which is a staple of many successful small businesses.
Terminating People Legally With The Right Documentation
Small businesses need to follow the same termination processes that larger businesses do. It is important to document write ups and terminations appropriately to protect the business legally. No business wants to be tied up in court due to an employee being upset on account of being a terrible employee. There are some people who lose their jobs for a just reason that still want to make the lives of those at the business miserable. Do not let cash flow be tied up in this type of case as it can be utilized in much better ways.
Be careful of the above mentioned things when your business is young. This type of prudence being established early can lead a business to be successful for years to come.