No one who goes into business does so expecting to fail, but unfortunately, that is the outcome for many business owners. Several causes keep recurring in the many studies made into small business failures. These are bad management, failure to plan, lack of capital, the wrong business structure and failure to seek professional advice.
Why do these businesses fail while others trade successfully for many years, providing employment for staff and financial security for the owners? After many years of experience helping clients run successful businesses, we think we have the answer to this question. Charter Partners are accountants and business advisors, and from our experience, we have found five essential attributes, or secrets if you like, to business success.
Planning for the Future
In the next 15 years, 40% of the jobs that exist today will not exist, with manual tasks replaced by automation and robotics. Planning for this is just one example of the need for strategic thinking by business owners. Plans made today will change, but the task of changing them will force owners to face future challenges instead of ignoring them.
Leading from the Front
Never underestimate the influence a good leader exerts. People will work hard for a good leader; they will put forward ideas, as well as being loyal and interested in their job if they feel they are respected. Most leadership skills can be learnt, so an owner without those skills can acquire them.
Keep Watching the Capital
A business can have everything going for it and still fail if the flow of capital is insufficient to run the daily operations. Searching the market for a capital inflow in an emergency usually results in the business having to accept unfavourable loan terms, when a better outcome was possible if the problem had been recognised earlier.
Look at the Business Structure
Many small businesses start out as sole traders, but as they grow and prosper, this structure can be restrictive. There may be tax advantages to other structures that are unavailable to a sole trader. It can also limit the opportunities to sell the business in the future, as its identity and that of the owner are difficult to separate.
Get Professional Advice
Every successful business owner seeks professional advice from accountants, solicitors and financial advisors. Developing relationships with such experts keeps owners in touch with legislative and market changes, and helps them to make decisions that are more informed.
Along with taxation and audit services, we offer a range of other programs to assist our business owners improve every facet of their operations. Our Business Mentoring and Business Partner Programs are just two of the additional methods we use to help our clients stay ahead of the competition.