MODERN ENTREPRENEURSHIP
6 Things every start up
needs to know about
running a business
B
By Alan Manly
ehind every start up is an
aspiration to do something
different. The attraction to do
something different attracts fellow
travellers all keen to be different
and break with the boring services,
products and maybe procedures of
more established companies. This
can be a trap for young players.
Behind every successful and exciting
company is a boring administration
department with cunning concepts
that keep companies trading. So
if you’re thinking of going it alone,
here’s what you need to consider
first:
Cashflow
The three most important things in
business; are cashflow, cashflow
18 ModernBusiness
April 2016
and cashflow. Most start-ups have
seed capital or reserves contributed
by supporters. Many start-ups do
not worry about cashflow. They draw
comfort from having cash as their
reserves. This reckless disregard
for the value of cash is a sure sign
of a start-up. Start-ups don’t have
reserves, they only have time to
make money before the cash crisis
that awaits is recognised. Many
good businesses cease to exist, not
because their products don’t work,
nor lack of sales. They simply run
out of cash.
Get sales
Most start-ups have a key customer
or two. The risk is that these few
customers will keep the start-up
captive at the expense of any new
sales. The start-up owner/s may
have accidentally put their deposit
down on buying themselves a job,
complete with a licence to work
lots of unpaid overtime. The point?
Sales to new clients are vital for a
company to survive – diversify your
interests.
Get Paid
Debtors are people who owe you
money, are in debt to your company
for the goods and/or services you
provided. Debtors owe your company
cash. By not paying on time a debtor
is saying that they don’t mind if you
go broke. Each week that they don’t
pay, your cash reserves are further
depleted. If you have enough slow