Guest post by Ali Golds, MD www.operation-enterprise.com @opEnterprise; Entrepreneur and Speaker

We’ve already established that running your own business is huge fun and very exciting but, as with all things, there are likely to be some pitfalls along the way. Writing a business plan will help to identify some of them in advance but there will still be the unexpected challenges that crop up here and there.

So what can you expect?

Most pitfalls involve money in one form or another, and will be variations on the theme. Either you will spend too much or not get enough in when you need it.

Cashflow forecasting.  It’s all very well writing a cashflow forecast for a business plan but, as I said last week, don’t then put it on the shelf and not refer to it again. A large amount of business failures are due to not knowing the basics around your company’s cashflow – how much you need to come in, and how much you need to pay out. Check and update weekly! And whilst you’re at it – check your bank balance at least weekly, if not daily. Particularly before you spend any money. Make sure you can afford what you are about to purchase.

Collecting in money. So you’ve made a sale! Congratulations! Now you need to collect the money. Too many businesses leave it too long from invoicing to collection; thinking that clients will pay according to your invoice terms. Sometimes they do, and sometimes they don’t. The minute they have missed your payment date, you are effectively funding their business. But what about yours? How will you pay your bills? Make sure that you are always on top of money owed to you.

Not making enough sales. You must be constantly out and about developing your business and finding new clients. They won’t come to you; often you must go to them. Relying on your marketing is not going to be enough, you must be proactive. Network, research and approach. Every day. Without fail! Not enough sales = no business.

Growing too fast. This might seem to be an odd pitfall but it’s not uncommon. Companies find a niche in the market, exploit it successfully, start to grow, get more clients, grow faster and everything looks rosy. However, unless the financial side is handled carefully, this can be a problem. It is very easy to get carried away with the fabulous increase in sales and not keep an eye on the production line, or ensure that product or service quality is up to scratch. Or that the money is coming in as it should. This is a perfect time to bring in an experienced business mentor to help the company through this tricky phase.

On a personal level, it doesn’t take long before your new business becomes your passion and you find yourself working long hours every day.

Whilst I totally understand the compulsion – and am more than guilty of doing it myself – you need to make time for yourself too. When you run your own business, you can’t afford to be ill. If you’re not working you’re not earning. So make sure that amongst all the fun and excitement, you don’t work through the night or every day of the week and that you diarise in some time just for you.

You won’t regret it!

Ali

p.s – I am delighted to offer all Rotaract members a 10% discount to my start up workshop taking place in Brighton on the 2nd December – please see details here: http://www.eventbrite.co.uk/event/7183194127

If you would like to book a place please contact me directly via email: ali@operation-enterprise.com

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