It’s easy to feel excited when you set up your own business, which will – theoretically, at least – unleash a lot of freedom in your working life. However, the day-to-day running of that business can be fraught with difficulties – such as those of paying for overheads, finding the right customers, or simply making ends meet. Below, we look at common issues and how they can be addressed.
1. A Lack Of Profitable Customers
A business can’t reliably sustain itself without a steady stream of income, and your business might have many customers who are helping to keep the company financially fuelled. However, you could help maximise your company’s return if you identify – and then focus your efforts on – the right kind of customers: those who are most helping to keep your firm afloat and thriving.
Talk Business advises that you focus on those customers who have the “highest volume of sales and repeat custom.” Your efforts here should include integrating “analysis of any costs associated with particular customers so you can clearly see their worth to you.” However, as well as engaging the best ones on social media platforms of their choice, you should aim to attract new customers.
2. Not Offering The Right Payment Methods
If your endeavours to win new customers bear fruit, you still need to make it easy for them to pay. One mistake you might have made is limiting yourself to local payment methods.
Yes, you might primarily be aiming to attract local customers for now – but why risk alienating customers from further afield? Also, you might be underestimating how widely used those payment methods are even among local people. Why not accept more mainstream credit and debit cards?
Similarly, you may be jumping onto a bandwagon too early with some payment methods. For example, Apple Pay might seem trendy, but how many of your customers are likely to both have the Apple devices needed to use Apple Pay and be aware of how to use it?
You could still integrate Apple Pay compatibility into your online payment system at some point; however, you might benefit from prioritising more globally recognised payment services like PayPal.
3. Late Payments
This actually ties in with the point that has just been made – as, if you make it too difficult for clients to pay, you could run a higher risk of late payments. Overdue payments, in turn, can affect your firm’s cash flow to a seriously adverse extent.
Sadly, you could too easily run into this problem, as 53% of Britain’s small firms face overdue bills, reports Startups.co.uk. In fact, in total, a huge amount of about £255 billion is waiting to be paid to small businesses in Britain.
There are still ways in which you can counter late payments. Those ways include switching to electronic invoicing if you don’t already use it. You could also level penalties or add interest for payments that big companies do not make in a sufficiently timely manner. Another good idea is to save some money that can act as a financial cushion when times get tough.
4. Excessively Pricy Overheads
Even if you continue to bring in extra money due to success in attracting new customers and keeping existing ones, your financial performance might be crippled by expensive overheads.
Maybe you have shelled out for more than what you genuinely need; for example, does your firm really need a bricks-and-mortar unit when online operations would suffice? They might even be an improvement due to their greater ability to promote your company to more than local people.
5. Insufficient Preparation For Legal Necessities In Foreign Markets
Naturally, it is essential that you know intricacies of corporate law in the country where your business is primarily based. However, there is a risk of failing to heed the legal implications if you wish to expand your company’s operations into another country.
You should avoid overlooking the complexity of international tax laws. The Telegraph warns that “it is never safe to assume that you only need to comply with the tax rules in your home country.” While many countries do have double taxation treaties, a professional’s advice should always be sought on matters including what taxes need to be paid and where and by when.
Of course, tax isn’t the only thing you should think about when entering a foreign market. You should investigate whether you need to be accredited or approved by a regulator or meet local trading standards. Not satisfying relevant legal requirements could result in you getting heavily fined or even banned from trading.
Let’s assume that your firm is set to start operating in the UK. In this situation, any van that you use for commercial purposes would legally need insurance, though this can be cost-effectively sourced from UK broker Call Wiser.