Starting up a business takes a lot of work and with that comes a shed load of pride. No one wants to defiantly walk away from employment only to return a couple of months later with nothing but an overdraft to show for it. No one wants to be working long hours to pay back a loan from a failed dream. No one ever wants to be sat in an empty office or shop wondering if today is the day when you admit that it's over.
However, 20% of new businesses will fail in the first year and 50% within five years. And that's fail. That's not those who are working every available hour or those who have taken out yet another loan to keep on trying for one more year. That doesn't include those who are breaking even.
I don't mean this as a doom and gloom blog. In fact, what I hope to show you is that everyone has cash flow problems and the vast majority will either be having these problems today or if not today, then possibly tomorrow or maybe even yesterday.
The thing is we all become slightly peacock-ish when we have a business. It's like a kind of mating ritual that you'd see on a natural history documentary. Everyone dances around each other. There's big shows of wealth and success. Look at my new car! I've just opened another shop. I've taken on more staff. Look at my awards. Oh, thank for noticing, yes these are new shoes.
It's only natural to want to dance with them. You don't want to be the weak antelope in the networking pack. Look at her, she won't survive winter, they'll mock. So, you get a car on finance, maybe stretch that overdraft a little bit more or take a pay cut yourself so you can hold off making that overdue redundancy.
We all assume that everyone else is successful. That's why so many business start-ups look to their competitors for inspiration. We advertise in the same places as we assume that if our competitors are there then it must be working. We sell things at the same prices because we assume that, well if they can make a profit, then why can't we.
No one wants to admit that things aren't going well because we assume that we'll lose business, we'll lose face and more importantly we'll lose pride.
So, what we do, is we focus on sales. You push and push. 50% off just to get people through the door. You accept anyone with a cheque book and a pulse as a client. You agree to do work that you don't enjoy doing or possibly that you can't even do well. Everyone is shoved down that sales funnel if it means that you'll be able to make payroll at the end of the month.
But what if you stopped for a moment. What would happen if you called up your accountant and said, "can we talk, business is shite at the moment"?
I can guarantee that they won't laugh at you. There won't be any pity. And that's because we see it every day. You might see the dancing but we see the balance sheet. We are trained to identify cash flow leaks.
So, I want to make 2017 the year of improved cash flow, which means that over the coming months I'll share with you some cash flow tips. You don't have to tell anyone that you're reading them. Or even why you're reading them. But if you're struggling and paying bills is keeping you awake, or you're making loads of sales but the bank account is empty – please read them. It'll will enable you to dance for far longer.
However, 20% of new businesses will fail in the first year and 50% within five years. And that's fail. That's not those who are working every available hour or those who have taken out yet another loan to keep on trying for one more year. That doesn't include those who are breaking even.
I don't mean this as a doom and gloom blog. In fact, what I hope to show you is that everyone has cash flow problems and the vast majority will either be having these problems today or if not today, then possibly tomorrow or maybe even yesterday.
The thing is we all become slightly peacock-ish when we have a business. It's like a kind of mating ritual that you'd see on a natural history documentary. Everyone dances around each other. There's big shows of wealth and success. Look at my new car! I've just opened another shop. I've taken on more staff. Look at my awards. Oh, thank for noticing, yes these are new shoes.
It's only natural to want to dance with them. You don't want to be the weak antelope in the networking pack. Look at her, she won't survive winter, they'll mock. So, you get a car on finance, maybe stretch that overdraft a little bit more or take a pay cut yourself so you can hold off making that overdue redundancy.
We all assume that everyone else is successful. That's why so many business start-ups look to their competitors for inspiration. We advertise in the same places as we assume that if our competitors are there then it must be working. We sell things at the same prices because we assume that, well if they can make a profit, then why can't we.
No one wants to admit that things aren't going well because we assume that we'll lose business, we'll lose face and more importantly we'll lose pride.
So, what we do, is we focus on sales. You push and push. 50% off just to get people through the door. You accept anyone with a cheque book and a pulse as a client. You agree to do work that you don't enjoy doing or possibly that you can't even do well. Everyone is shoved down that sales funnel if it means that you'll be able to make payroll at the end of the month.
But what if you stopped for a moment. What would happen if you called up your accountant and said, "can we talk, business is shite at the moment"?
I can guarantee that they won't laugh at you. There won't be any pity. And that's because we see it every day. You might see the dancing but we see the balance sheet. We are trained to identify cash flow leaks.
So, I want to make 2017 the year of improved cash flow, which means that over the coming months I'll share with you some cash flow tips. You don't have to tell anyone that you're reading them. Or even why you're reading them. But if you're struggling and paying bills is keeping you awake, or you're making loads of sales but the bank account is empty – please read them. It'll will enable you to dance for far longer.
