Graeme Smith’s top 3 tips be for anyone in the early stages of setting up their business.
As a child I always used to get frustrated when my new birthday present didn’t work. The usual problem was that I had skipped reading the instructions and moved straight to the fun bit i.e. pushing the on switch and guess what, it didn’t do what it did on the TV advert! My wife would probably still say that this is exactly why my DIY work to this day leaves quite a lot to be desired, I don’t read the instructions for the tools and I don’t plan adequately for the project!
Reality is anyone who wants to build a successful business has to be highly driven and naturally will excel at the ’fun bits’ i.e. building the product/ service and meeting client’s needs. But without sound financial planning from the outset and at each stage of the business progression, all those efforts could well end up like that childhood toy, broken.
As the quote goes, ‘most people don’t plan to fail, they fail to plan’
So what would my top 3 tips be for anyone in the early stages of setting up their business…
Don’t skip crunching those numbers, ensure that you have a good grasp of what you believe are sound baseline forecasts that allow you to track performance towards your business goals. You need to be fully involved in this, yes seek support and help but don’t abdicate as you have to own the projections if you are to deliver them.
Plan three financial scenario’s namely i) a base case,ii) an upside case, but most importantly iii) a downside case. This allows you to assess what options or actions you will need to consider if things don’t quite turn out as planned (they rarely do!)
Set milestones for your plan and track your performance at those points. Readjust your plan at each of these stages as required.
Now is it ‘green and yellow wire live and then red is….