Learning to fail Cheaply

Starting a new business is a daunting task that many fail to achieve successfully. We’ve seen many a case where entrepreneurs lose everything on an idea and a dream. This not only impacts the individuals, but their families and employees. How can you avoid this from happening to you? We’ve put together a short list that illustrates key concepts to employ that will avoid unnecessary financial distress.

  1. Think small, be the acorn. Don’t try to be the Oak Tree right away.
    • Can your concept work from your kitchen table/shed or home? Don’t invest in real estate until you get traction.

 2. How much can you afford to lose in the first year?

    • If you can’t start making money or have the prospect of making an income in your first year then then you need to self-finance. Do not put your family at risk by mortgaging the house or taking on huge expensive credit card debt

 3. Leverage Technology early and often. 

    • Technology has the effect of cutting costs by making business processes’ easier, creating less demand for human interaction and labor expenditure. 
    • Use technology for marketing and promotion, become an expert in google ads, Facebook and Instagram, all useful and cost effective self-help tools to promote your business.

 4. Always know your numbers.

    • Know your Overhead, Costs per product, expenses and cashflow. Work with an accountant to ensure you are tracking everything and can make informed decisions in a timely manner.

 5. Protect yourself.

    • Secure Business Insurance, Trade Licenses and VAT Registrations, ensure you have spoken to a Solicitor and received a legal opinion on your liability. Paying for advice early on can save thousands more when an issue arises. Many start-ups forget the downside of potential problems and never think it can happen to them.

There you have it. A simple list to get you started and keep your head above water when you first start out.

Regards,

Rick

 

 

 

Published by

rickbarbosa

Our Senior Partner Rick Barbosa is a Professional Accountant and Personal Financial Advisor with over 25 years experience dealing with Large Fortune 500 Organizations and Small to Medium sized Family owned Businesses. If you're looking for help with your finances, taxes, investing or starting and managing a business you've come to the right person.

2 thoughts on “Learning to fail Cheaply

  1. Why would you want to learn how to fail cheaply? I mean, there are so many other better things that you can learn. I don’t understand the point of this article, to be honest. I hope that you can publish a better article.

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    1. Thank you for your feedback. I believe the best teacher is failure, and to accept that it is ok to fail in order to learn is the point of the article. Making it cheaper to fail, encourages the mindset of getting it right or doing it better next time.

      Rick

      Like

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