Poor cashflow management
Cashflow management means understanding the amount of money going into and out of a business, making sure you have enough money to keep your business running successfully. Not having enough money coming into your business (e.g. through sales) or having too much money going out of your business (e.g. through production costs, wages and rent) will eventually cause your business to fail.
A lack of financial understanding
Even if you hire an accountant, not having at least basic financial understanding as a business owner can cause problems and potentially business failure. Financial understanding is important when making business decisions, predicting your future cashflow and planning ahead for times you may have less money coming into your business, responding to tax requests with more confidence, negotiating costs with suppliers and much more.
When starting a business, it’s important to plan ahead to give yourself the best chance of success. You should decide on short-term and long-term goals for your businesses, break them down to give yourself a better understanding of how you will achieve them and understand the cost and finances needed to achieve your goals.
Weak marketing strategies
Marketing your business effectively is very important, especially as your business growing. You should think about the different channels you could use and the best ways to advertise on each of these. It’s also important to set a budget and understand the cost of each marketing campaign, making sure you are getting as much back as you are putting in, otherwise it will lead to cashflow problems.
Lack of customer understanding
As a business owner you should have a strong understanding of your target audience and their needs, thinking about what they will be expecting from your business, what is currently missing from other similar businesses and the ways they are most likely to engage with your business.
Give your businesses the best chance of success! View our accounting courses here or our business workshops here.