Avoiding financial roadblocks when starting a business

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Starting a business can be a daunting task. It's not uncommon for a startup to encounter financial failure. However, there are ways you can greatly improve your odds.

Here, we’ll share some suggestions for entrepreneurs who want to grow their businesses despite financial setbacks.

Build a Network

Building a network of reliable people is an important step to success. There are several ways to reach out to other business owners in the area.

You could go to social events where you can meet people in a related niche. You can also build your network without leaving your home. LinkedIn groups can be a great way of connecting with like-minded people.

Learn From Your Mistakes

Starting a business is challenging. It takes passion, motivation, and the ability to overcome past financial setbacks.

If you're among the many entrepreneurs who've experienced financial difficulties, consider what you've learned from your setbacks and how it will apply to your business moving forward.

Take Sensible Risks

You will need to take risks but try to be sensible about the risks you take. For example, if you're running a small startup alone or with two to three employees, signing an expensive, long-term commercial lease might be an unreasonable risk. You could just as easily do the work from a home office or rent a small, shared office space.

Pivot and Embrace Opportunities

Pivoting your business to survive is one formula that will help.

Pivoting is when you change your plan to pursue a better opportunity. As an experienced professional, you should search for opportunities within your business sector and seize upon them. Your business is likely to change, so it makes sense to modify your plan as you develop it.

Some new businesses also struggle because they think too big, too quickly. You may want to deliver a wide range of products and services to your customers, but it’s better to start small.

Focus on those products and services you know you can deliver and turn a profit from. Then, grow incrementally as new opportunities arise.

Create an LLC

A limited liability company (LLC) allows you to separate your personal finances from those of your business. They’re easy to start and cost very little to maintain. That’s why LLCs are the most popular type of business in the U.S.

Different states may have separate requirements when forming an LLC, so check the rules in your state before you go ahead. You can do the paperwork yourself or hire a formation service, which is cheaper than going through a lawyer.

Here are a few of the potential benefits:

  1. Reduce your liability. An LLC offers limited liability, which means that creditors can't go after your personal assets even if your business suffers a financial setback.

  2. Avoid taxes on your profits directly. Profits and losses pass through to members of your LLC, who report them on their tax personal returns. This protects you from being “double taxed,” once on your business income and once on your personal income.

  3. Get other tax benefits. Running a business as an LLC allows you to deduct certain business expenses, such as some operational costs, office costs, and more.

Understand Your Supply Chain

Most businesses require resources from other companies—their suppliers—to function. Navigating your relationships with these suppliers is a necessary, but frequently overlooked, part of doing business.

There are helpful guidelines to achieving supply chain stability, such as staying in regular contact with your suppliers and having multiple sources for the same supplies. Many businesses keep supply chain experts on staff to ensure that these relationships, and the challenges they present, are well handled.

If you can’t afford to hire a supply chain expert internally, there may be outsourcing options available.

Create a Business Plan

A well-written business plan is essential for any business to succeed. It helps you decide if starting your business is the right decision.

If the plan is well written it can help you apply for funding (loan or equity), and help in making crucial decisions in the day-to-day running of your business. Give yourself a deadline—for example, one year—and stick to it. Then, take every action you can to get your business up and running.

Market and Advertise

Next, don’t forget to advertise. You can take advantage of social media to reach a huge potential audience. Also, it's easy to create an infographic using this free tool, which you can then use to help spread the word through Facebook, Instagram, and other social media tools.

Naturally, you’ll need a website. You’ll also need to fill it with well-written content that speaks to your customers.

It’s best to update this content regularly, so you can share new insights with your network and keep customers engaged. It can be a challenge to write regular content, so don’t hesitate to reach out to content experts for some assistance.

Advance Your Education

Finally, if you feel like you could benefit from some extra education, pursuing an MBA is a great way to give yourself an edge and gain the additional skills you need to succeed. Many accredited business schools now offer online programs, so you can keep working while you go to school and implement your lessons in real-time.

Whether you’re a small business on the rise or an international company breaking into new markets, rand&rand can help you get consistent, timely content at the volume and speed you need.

Are you ready to talk content? Let us know.