Seeking out, and acting upon sound business advice, reduces the risk of early failure, and helps to ensure that starting a small business will be a rewarding experience.
People start-up small business enterprises for a wide variety of reasons and with an equally wide range of personal motivators. Regardless of the reasons and motivations behind any startup, setting up a new small business venture is a personally dangerous endeavor, especially if sound business advice is not sought, and then acted upon.
Whilst many who do start small business enterprises go in with their eyes wide open, based upon:
- successful previous business experience,
- extensive knowledge of the nature of the business environment,
- a good understanding of the capital requirements of a small business,
- a clear understanding of the market in which they intend to compete, and
- the possession of appropriate skill sets to run and operate a business,
others, unfortunately, tend to go in blind.
Major Causes of Small Business Failure in Early Years
Four common causes of small business failure in the startup phase are:
- Ignorance of the complexities of owning and operating a business,
- unrealistic views of the competitive nature of the small business environment,
- a lack of perception of the myriad of skill sets that are necessary to successfully operate a business, and
- insufficient understanding of the capital requirement of supporting a business until it experiences positive cash flows.
All of these reasons for failure are preventable, and can either be overcome with appropriate business advice and ongoing support, or the understanding of these reasons may assist in the making of a wise decision that perhaps, the risks associated with a particular individual starting a small business, are unacceptably high, and the individual will thereby avoid making a costly mistake. You may also need professional procurement consulting in case of production business.
Business Advice is a Critical Component of a Small Business Startup
In a majority of instances the decision to start up a small business is also a decision which places the financial future of the individual(s) involved, fairly and squarely on the table. Often the decision is one of necessity, or last resort, without careful consideration of the consequences to those concerned, if the business fails.
Regardless of the reasons and motivation behind the decision to become a business owner, any potential small business owner takes an immense risk in going it alone, without seeking appropriate advice. The types of advice that should be sought before any decision is made, include:
- Legal advice on the appropriate structures to put in place for the proposed business,
- Accounting advice on taxation implications and record keeping requirements,
- Financial advice on minimum funding requirements and appropriate sources of funds,
- Management advice on planning and skill sets required to operate the proposed business, and
- Marketing advice on the level of demand for the product or service offering and appropriate marketing methods for the target market.
The fact that much of the necessary advice is freely available, and to a certain extent actually free to the individual(s) seeking the advice, means that there really is no excuse for anyone not to take advantage of what is on offer, and use the information available, to give their new small business venture the greatest chance of avoiding the pitfalls, which cause many startup failures.
Sources of Business Advice
New small business proprietors can seek business advice from a multitude of sources including;
- National, State and Local Government Business Advisory Bodies,
- Local Chambers of Commerce,
- Not for Profit Mentoring Organisations,
- Friends and family already operating successful businesses,
- Banking and other business-specific Service Provider websites,
- Education Institutions,
- Legal Practitioners,
- Accounting and finance professionals, and
- Management and Business Consultants
It is important to seek advice from more than one source, and carefully evaluate the advice received, before rushing to implement any such advice. Acting in this manner will ensure that the full benefits of appropriate advice are gained.
Benefits of Seeking Business Advice Before Starting a Small Business
They are numerous benefits available to a new small business owner, who seeks sound business advice, before embarking on the challenging path to starting a business. The key benefits include:
- Ensuring that the business opportunity is a real opportunity and the right opportunity for the market in which the business will operate,
- Ensuring that the proposed business structure provides the right level of personal protection,
- Ensuring that sufficient financial resources are available to get the business through its start-up phase and past the break-even point,
- Ensuring that all legislative, regulatory and governance requirements are met and a clear understanding of what is required on an ongoing basis is understood,
- Ensuring that any deficiencies in management skills are clearly identified and a plan for overcoming these before the business commences are developed, and
- Ensuring that family and other social support mechanisms are strong enough to assist the business owner to survive the challenges inherent in starting a small business in a competitive environment.
Starting a new small business without seeking appropriate business advice is akin to gambling one’s life on the toss of a coin. Given the clear benefits of seeking advice on how to start a business, it is almost reckless to proceed otherwise, as any business failure will impact severely on all directly concerned, and will probably also impact negatively on others, less directly concerned.