5 Tips To Survive In A Start Up Business

Is the end near for physical shops? Well it is certainly tough out there.

Meanwhile, Amazon sales were up over 40% in the first quarter of 2018. The online retailer made a profit of $1.6 billion.

Jeff Bezos became $12 billion richer on the basis of a 4% increase in the share price!

Mark Zuckerberg made $5 billion this week but Larry Page and Sergei Brin the owners of Google lost 2 billion - maybe it fell down behind the sofa?

Crazy figures that really relate to fluctuation the share price. I’m sure neither of these guys will be going out ordering new yachts or having a garage sale!

The news of online success comes on the back of failing High Street stores in London and the collapse of major chains like Toys R Us, Maplin and Carpetright.

So why am I telling all this? What is this got to do with money tips? The answer is that opening up shops in the High Street is highly risky for the new business person.

In my local area there are four major supermarkets sucking money out of the High Street and driving small retailers into the ground. Not content with that, they are also opening smaller 7-Eleven-style corner shop stores to pour more misery on the little guy who can only survive by running the business within the family and working 18 hours a day. Frankly, he would probably better off driving a bus.

Every year in my town I see more hopefuls open up a shop selling everything from smoothies, specialty ethnic groceries, restaurants, mobile phone cases to expensive bathrooms.

Before they open the doors they are incurring around £1000 per week in bottomline costs excluding staffing. That doesn’t include the cost of refurbishing the shop and buying stock. Not surprisingly, 95% of the shops are gone within a year or two. Even national companies have closed stores and restaurants, so what chance has a newby got?

Losing a business not the end of the misery for the owners of a failed shop. Most would’ve signed a long lease and personally guaranteed or signed a personal guarantee to pay the rent regardless of how the business goes. This means they will be paying for the premises even though the business is no longer running until such time as the shop has been relet Which can take months or even years.

If they fail to pay the landlord can take action against the former tenant and even force them into bankruptcy or take their house.

Under the terms of the lease, the landlord can also charge for dilapidations and the cost of refurbishing the shop or office premises.

I have been on the end of this treatment by greedy landlords try and charge for every scuff mark on the carpet, which is then replaced by the new tenant at no cost to the landlord.

Each year thousands of people start up businesses in the hope that they can improve their financial situation or become financially free. Unfortunately, over 90% of these businesses will fail within the first few years.

Here are 5 tips to survive in business

1. Keep costs under control

One of the main reasons businesses fail is through lack of sales or marketing, But costs play a significant part in their downfall.

I have found that if businesses can survive the first few years they have a good chance of going onto earning profits and succeeding in the long run.

One way of keeping down costs is to start the business from home, preferrably part-time to start with, rather than renting an office or shop premises.

2. Start Online

Starting an online business with little or no start-up costs gives you the chance to make money without risking your savings and your house. You can also run an online business in your spare time until you start making money without giving up your day job.

3. Build Your Business Before Opening a Shop

Is the High Street Cornershop days over? Not quite, but the market is going through significant changes. The old butcher, Baker, candlestick maker doesn’t cut it anymore. There are more and more estate agents, Hairdressers and nail bars taking up retail space.

If you want to have a retail business in the High Street, build it up first from home and then expand into a shop premises when you’re ready and there is proven demand for your products.

4. Write a business plan

Before you start any business Write a proper business plan and get legal and accountancy advice, as well as a cash flow forecast. Some banks will help you with this and there is online and offline advice avaialble. A plan can be a few pages of A4 and doesn’t need to be in elaborates 100 page document. The main thing is that you know what you want to achieve, how to achieve it, what it will cost and a forecast showing how much cash you need each month to run the business.

In my experience, most businesses just start get going without any form of business plan and then work it out as they go along. To be honest, I’ve done this myself, but it is not wise to fly by the seat of your pants. Do it the easy way And you will avoid sleepless nights and risking everything.

5. Build a Following

Building a following will separate you from the vast majority of your competitors who just start a business and hope that customers will come through the door. But you can hope and meditate and chant "om" all day long, but unless you do some marketing and build your following you will soon be out of business.

One of my mentors Russell Branson has written a fantastic book about building a following and tribe called Expert Secrets. Russell has a special promo running for a limited time where he will give you the Expert Secrets book for free as long as you pay for the postage.

Grab a copy while stock lasts, it could change your life.

I can send you the link if you email me at Charles@CharlesKelly.net or check out our Facebook page which is www.facebook.com/moneytipsdaily