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The most common financial mistakes graduate entrepreneurs make

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StrategyDriven Managing Your Finances Article |Graduate Entrepreneurs|The most common financial mistakes graduate entrepreneurs makeAmongst the world’s ambitious graduates are some of the next generation’s entrepreneurs and innovators. Some will have a carefully defined business plan. Others will have little more than a dream and bundles of enthusiasm.

Starting out in business straight after Uni isn’t easy. For the bright-eyed grad, a lack of life experience and industry expertise, along with a mountain of student debt can make the business journey a particularly tricky one. A recent report by CNBC warns that with graduate debt at around $30,000 for many students, starting a business is a huge challenge. It really is no wonder graduate entrepreneurship is declining.

As well as student debt, there is also the issue of financial know-how. Let’s take a look at some of the most common financial blunders graduate entrepreneurs make.

1. Not having a business plan

Accounting firm, OS Accounting, say “One of the mistakes a lot of entrepreneurs make when launching a start-up, including graduates, is to forge ahead with an idea without proper planning. Starting a business without a business plan is risky. It’s the fundamental starting point for testing whether or not a business idea is feasible.”

A business plan sets out the financial and operational objectives. With a well-developed business plan, entrepreneurs are also much more likely to attract angel investors or secure funding from venture capitalists.

2. Overestimating revenue

Brimming with optimism, entrepreneurs are renowned for overestimating revenue. In fact, for many eager graduates launching a start-up, revenue expectations are unrealistic. David Cummings, an Atlanta-based tech entrepreneur who has founded 10 companies, understands all too well the pitfalls of overestimating revenue.

3. Overspending on set up

A whopping 29 per cent of start-ups fail because they run out of cash. Early-stage entrepreneurs face specific challenges as they often lack business skills. Many entrepreneurs overspend on office space and tech tools.
With remote working becoming the norm, the virtual office, where possible, can save a lot during set up. Taking time to properly research tech tools can also save money. Various pieces of tech often overlap – as they are charged per user, spend can easily go up if this isn’t given attention.

4. Misunderstanding the difference between profit and cashflow

Things can look good on paper, but if a business runs out of cash it is in trouble. Poor cashflow planning and running out of cash is, according to Forbes, in the top 10 reasons why entrepreneurs fail.

Not all entrepreneurs have savvy accounting skills when they set out in business. Some basic accounting knowledge can prove invaluable. Most businesses record revenue and expenditure when it is incurred (rather than when invoices are paid). This means it is possible for a business to be profitable on paper, but not have any cash in the bank.
Business coach, Stever Robbins says the difference between profit and cashflow is often the difference between success and bankruptcy. Being able to read the accounts and understand the cash position in a business is vital.

5. Mixing personal and business accounts

Running a business through a personal bank account is never a good idea. Business banking should be kept separate and the importance of this is all too often ignored by eager graduates who want to avoid the expense of a business bank account.

Mixing personal and business bank accounts can also turn out to be a nightmare when it comes to tax reporting. It makes it easier to miss expenses and could be an issue if the business is investigated by the Inland Revenue.
In an article for Inc., Levi King, entrepreneur, CEO and Co-Founder of Nav, advises never to mix personal and business finances for the following reasons:

• Separating business and personal finances helps you look legit
• It helps to achieve a stronger business credit score
• It helps with tax reporting

6. Not budgeting or planning for tax

All businesses have tax obligations to the state and locally, and tax bills can hit fast and hard. Ignoring taxes is one of the top business budgeting mistakes. Seeking tax advice prior to starting a business is also something many entrepreneurs fail to do, but with the right tax strategy, tax liability could be considerably lower.

7. Not having an emergency fund

Cashflow is king when it comes to business. Many graduates finish their education in debt, not with an emergency fund they can fall back on during hard times. The U.S. Bureau of Labor Statistics reports that approximately one-third of all businesses fail within the first two years because of cashflow issues.

Summary

In spite of the pitfalls, there are many advantages of launching a start-up as a new graduate. New grads actually make great entrepreneurs. Many graduates are both innovative and more financially-savvy than they get credit for. The student mentality of surviving on a pittance can also bring business benefits.

There are lots of financial considerations for graduates, including how to repay student loans and finding a deposit for somewhere to live. That doesn’t mean graduates can’t start their own business. Here are 8 reasons why as a graduate you might want to give entrepreneurship a go. Remember, business planning is key!

Advice For Launching Your First Business

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StrategyDriven Starting Your Business Article |Launching a Business|Advice For Launching Your First BusinessPlanning on launching your first business? This is an exciting time, and you will be keen to get started, but running a company is no easy task, and there are a lot of areas that need careful consideration. You hear of many businesses going belly up before they’ve even had a chance to succeed, so it is understandable if you have some anxiety about launching your company. Read on for a few tips which should help you to avoid common mistakes, hit the ground running, and build a platform for you to go on and find success with your first business venture.

Carry Out Thorough Market Research

Before you get the ball rolling, you need to make sure that it is a viable business option. It might be an idea that you are interested in, but it needs to be something that is in-demand which you can find out with market research. Look at the current state of the market, who your competitors are, who your target customer is, if there are any gaps in the market, and if there is the potential for success.

Create A Plan & Get Sufficient Funding

You can then use your market research to create a detailed business plan which will detail your understanding of the market, your USP, a business model, and financial projections. The business plan can act as a guideline for your company, but it can also be used to secure funding. You need to make sure that you acquire sufficient funding so that you can get the operation running up to a high standard. There are many options for acquiring funds, including venture capitalists, loans, angel investors, and crowdfunding.

Build A Brand

Your brand is how you differentiate yourself from the competition, and it should always be eye-catching, stylish, and relevant to your industry and target customer. It should also be a reflection of your brand personality and values. This will include a company name, logo, and slogan but also your approach to business. You will then need to register the business and secure a domain name for the website.

Online Presence

Leading on from this, you then need to create a strong online presence as this is vital in today’s day and age. This will include an attractive, functional, and valuable company website and being active across social media channels.

Legal Support

It can be daunting when you start a company for the first time as you will want to make sure that everything is legal and above board. It is a good idea to find a lawyer that specializes in business law, such as charlestonlaw.net. In addition to helping you to get up and running from a legal standpoint, they will also be able to help with any legal difficulties that you encounter at any time.

Starting your first company is an exhilarating experience, and you are sure to enjoy many aspects of the process, but it can also be stressful, and many new entrepreneurs make the same mistakes. The above tips should help you to avoid common pitfalls and provide you with a solid foundation to go on and find success.

How To Up Your Chances Of Success In Anything

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StrategyDriven Practices for Professionals Article |Success in Business|How To Up Your Chances Of Success In AnythingWhen you begin your journey into success, no matter what it is, your end goal is always to reach the pinnacle. Perfection is an impossible feat, but you have to strive for that – otherwise, what’s the point? For as long as you remember, you’ve always been told about following your dreams and making the most of life, but the pep talk always tends to be left at those clichéd soundbites. Many hear motivational speeches and shrug their shoulders because they’ve heard it all before, and it hasn’t made a difference to their lives at all.

The good thing is that success, especially in the business world, can be found by absolutely anyone. You don’t need to have anything special about you in order to hit heights that not many have before. Anyone who has ever managed to find success in their lives has been nothing other than your regular, typical person. We like to place them above us and treat them as though they’re extraordinary when they’re simply a human.

You want to be at the top. You want to be like those you see and read about. If you have any lingering doubts about whether you can align yourself with the best, don’t worry, you absolutely can. Let’s look at some ways you can increase your chances of skyrocketing the project(s) in your life.

Stick To Your Plan

You need to have a structured idea of how to do things. You need this because making things up as you go along will only get you so far. A plan acts as a roadmap for the future as well as a priceless piece of information to refer back to. When you forget a certain aspect, you can just look at the plan and refresh your memory.

Never Stop Learning

You may think that you’ve gotten everything you need stored in your noggin (especially when you’ve managed to find a reasonable amount of results), but there’s always more you can fit in there. Those at the top of the game always behave as though they’re just starting out when it comes to taking in information. There will always be somebody that knows a little more about a certain topic or niche than you.

Remember That You’ll Always Need Help

Much like how you’ll never know all there is to know, you’ll also not be able to do everything by yourself. Even if you’re in a group or you have employees handling stuff for you, you’ll no doubt still need to pick someone else’s brain or an extra pair of hands. Contacting an IT Support firm for tech issues, a freelancer for the nitty-gritty or someone super specific should always enter your mind when you’re at an impasse – or even if you’re not.

Make Sure It’s Something You Enjoy

You’ll always get better results when you’re enjoying the ride. Think of everything you’ve ever done that numbed your mind – you went slowly and couldn’t wait to get away from it, right? When you do stuff that you like, the extra motivation to get it done isn’t necessary as you’re already knee-deep into it naturally.

Key Steps To A Successful Business Strategy

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StrategyDriven Strategic Planning Article |Business Plan| Key Steps To A Successful Business StrategyBefore opening the doors to your new business, you need to make sure you have a plan of action and a set of goals in place. If you don’t have an end game in mind, you’re going to have a disorganized, chaotic mess of a business.

Write a Mission Statement

This sounds like a piece of cake, but this is instrumental to defining what your business is all about. It needs to be crafted in a way that is clear and conscise to the readers. This is your way of showing your customers what you are trying to achieve in this business. Your guiding values will be outlined to show how business decisions are being made. Without having this vision, your company will run the risk of becoming distracted and having the train steer off of the tracks.

Creating a Strategy Plan

As StrategyDriven discusses on their website, “Not only does a compelling, well executed strategy align individuals to a common purpose, it ensures that purpose best serves the company’s mission.” The key message in there is having a group of individuals all on the same page with a common purpose. Everyone knows the company’s goal. This company provides an array of online tools to help businesses develop a strategy plan and how to properly implement them.

Your company’s strategy plan can be written with long term expectations or short term expectations. This plan should identify the steps needed to achieve the company’s mission. It is probably in the best interest of the business to write short term expectations with such a fast, evolving world. Things change constantly, so it is important to plan for the short term to lead to longer term success.

Strategic Implementation

You have your strategy plan in place, so now what? It is time to carefully implement your strategic plan. This is where you define “how” the strategic plan will be implemented and “who” will be responsible for implementing it. It is key that people have clearly defined roles at this stage of the process.

In Essential Steps to a Successful Strategy Implementation Process, they identify the key basic activities needed to implement your strategy.

  • Establishment of annual objectives
  • Fomulation of polices for execution of strategies
  • Allocation of resources
  • Actual performance of tasks and activities
  • Leading and controlling the performance of activities or tactics in various levels of the organization

The entire team of staff members are needed for these activites to be successfully implemented. From senior management to the general management team, everyone needs to be on the same page to begin this implementation.

Allocation of Resources

Of course, it goes without saying that money is needed to begin any successful business. In your strategic plan, it is essential to determine the amount of resources that will be needed to follow through on your objectives. Money may need to be allocated for resources such as document scanning, computers, staff, and understanding if you financially will have enough time to see the implementation all the way through. The worst thing that can happen if that you run out of money before your business can really pick up any momentum. This is something that needs to be clearly defined and studied in your action plan.

Structuring Your Business

Establishing a clear cut chain of command is essential for your business. People need to know their responsibilities and who they are to report to. You don’t want to have your employees confused as to who is responsible for what. It also needs to be stated the importance of clear and open lines of communication. Everyone from the top to the bottom should feel comfortable speaking to someone about a problem or any questions they may have. This will help to facilitate the flow of your strategy plan.

Creating a Great Working Environment

One thing that seems to get overlooked when starting a new business is understanding the importance of establishing a strong work culture. You want your employees to enjoy coming to work every day and helping to positively spread the message of your company. A cohesive unit all working towards a common goal will lead to ultimate success. But, as a business owner, you should be establishing your business culture from day one. There should be incentives for employees as well as sanctions for any mistakes that happen. People should know what they are accountable for and feel comfortable to speak with anyone if they have any concerns. The cultural expectations should be followed by every member of the business.

Businesses should have programs in place to support employees. The proper training needs to be implemented from day one. There should be a training program for all new employees before ever starting the job. This is where you can clearly establish your policies and show off the culture that you’ve created in your business.

Employees and customers should also be able to comfortably provide feedback to help improve the organization. Knowing ahead of time that mistakes can happen and having plans in place to help fix the mistakes should also be established.

In Conclusion

Starting up a business is a huge endeavor. But, knowing the importance of having a full action plan in place before ever starting your business is the first step to success moving forward. Don’t be afraid to let your guard down and ask for help from experienced companies that provide the business support that you need. It just makes perfect sense to communicate with companies that have found success and create a similar model to theirs. Utilize the many online business consulting firms available and create a business that others will consider to be a model business in the future.

3 Ways To Run A Successful Business

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StrategyDriven Managing Your Business Article |Business Startup| 3 Ways To Run A Successful Business Starting a business can be the ideal path for some people. It offers freedom, a sense of achievement, potentially more money than if they had been working for someone else, and it can improve the work-life balance substantially. However, although many businesses startup, not all of them are going to be successful; many of them fail or don’t do as well as first hoped. Read on to find out just some of the ways that you can run a successful business and make the most of your self-employment.

Do Your Research

One of the most important elements of running a successful business is to know that you will be successful from the start. This doesn’t mean having a ‘gut feeling’ about doing well; it means doing plenty of research to show that your idea is something that is needed and can grow. The more time and effort you can put into your research, the better it will be as you will have answers to all the questions that might be asked of you, and that you might ask of yourself.

Not only do you need to know that your products and services are different (or different enough) to what is already available to make a difference, but you also need to know who is most likely to buy from you. If you know this, you can adjust your marketing strategy accordingly, and give yourself the best chance of being seen.

Have A Good Website

A website is all-important when you run a business. You might choose to set up an e-commerce site to enhance your sales, or even to be the business itself. Alternatively, your website might be more about offering information to your potential customers and showing that you have all the relevant knowledge and expertise that they want and need you to have.

Whatever you use your site for, it needs to be well-designed and easy to navigate, with enough information on it to satisfy people’s requirements, but not so much that it becomes cluttered. This can be a difficult balancing act, especially when you factor in SEO. Using SEO Fuel’s consulting experts to help you rank well with search engines will ensure that your website is helping you grow your business rather than damaging its reputation.

Provide Amazing Customer Service

Your customer service will need to be the best it can possibly be if you want to have a successful business. No matter how interesting or useful your products and services might be, and no matter how much of an expert you are regarding them, without good customer service your buyers will look to other companies – those that do have good customer service – to help them instead of you.

There is a lot of choice for people these days; they can buy products from all over the world, and no longer have to use a business just because of how close it happens to be to them. This means there is a lot more competition, and if the customer is not treated in the way they feel they should be, you will lose out.