The Right Way to Starting Your Small Business

Becoming an entrepreneur is a bold and exhilarating endeavor. While this is often fueled by a desire to stand alone and establish a source of income doing what you love, making sure the business is thriving in a different ball game. The stark reality is that a significant number of small businesses face the harsh winds of failure within the first few years of operation.?

If your business hasn't surpassed this critical threshold, how do you plan to not only survive but thrive amidst the ever-changing business environment??

To aspiring entrepreneurs have you factored in all the possible economic scenarios that can affect the business performance and longevity?

For most small business owners, starting a business often goes from business ideation to idea implementation; rarely do we spend more time on accessing the business critical success factors, including but not limited to crafting a concrete Business plan a marketing strategy, and a financial forecast.?

What you fail to understand is that these important factors will to a large extent, influence the success or otherwise of your business.

You need to understand how your business will be generating revenue, the amount of funds required to purchase the business asset and expenses, and even how your business will react to changing business environment.

How will your small business thrive without a realistic forecast to thrive on??

The current economy is showing the rising need to become proactive - anticipating how economic shocks and changes in government regulations that your business will be exposed to can impair profitability and then seek out alternative ways to ensure your business remains a going concern.?

Well, this changing reality is why you need to start your business on the right path.?

Having successfully implemented a test phase for a proposed business venture I intend to establish, it has made me think of how best to ensure that the actual business, when I finally proceed with it, will be profitable.?

Because the economy is experiencing increased inflationary pressures, I have gone ahead to create a five(5) years financial projection for my business to see at a glance if my anticipated revenue will be able to absorb all of the business expenses and still yield a return. It is important to figure out before implementing that if the economy goes worse than it currently is, will my business still be feasible??

What if inflation increases? What if the tax rate increases??

Thankfully as a financial analyst, I have been able to create a dynamic five-year financial model that provides answers to these questions.

Below is a snapshot from the financial model showing how much finance is required to fully the business.?

Like the saying goes - ‘If you fail to plan, then you plan to fail.’

If by now you haven’t invested in creating a business model to test the viability of your business idea, chances are you may not be able to take your business past the critical threshold, just as many small business owners couldn’t.?

Also, if you have an existing business, now is a great time to prepare a financial forecast for the coming years. If you can’t anticipate changes in your business environment, how then can you proactively maneuver it??

For your business to thrive, there is the need to go beyond drafting a budget to make financial projections to look into the future., and start making critical decisions now.?

If you need help creating your business model, kindly contact me. Your journey to business success begins with a strong foundation of planning and foresight.