Tips and practical advice to ensure your business thrives. Photo / 123RF
Tips and practical advice to ensure your business thrives. Photo / 123RF
Treating or thinking of your business as an extension of yourself is the first mistake to avoid when starting a new venture.
A former chartered accountant, who says he has worked with thousands of small and medium-sized businesses over the past 30 years, says it is important to keep abusiness and your personal life separate as much as you can to give it the best chance to succeed.
John Angell, author of self-help book Be Your Own Boss and Succeed. The 7 Qualities of a Successful Small Business Owner, says "respecting the business" is one way to do this.
This includes keeping business and personal bank accountants separate, and if you can afford to, reinvest all profits back into the venture.
"Treat a business initially as a baby. It has to be nurtured, it has to be allowed to grow, take minimal from the business through those stages," says Angell.
It may seem obvious, but too commonly, Angell says, he has through his work as a chartered accountant seen business owners regularly clear out their business bank accounts. He has worked with a wide range of businesses including pharmacists, hairdressers, lawyers, farmers, plumbers, $2 shop owners, among others.
The first businesses that went under as a result of the Covid-19 pandemic were those that had no cash reserves and were living day-to-day, he says.
"You have to realise the business is separate to [you]."
Small businesses with zero to five employees account for 90 per cent of all New Zealand businesses.
But almost half of all new business fail within the first five years.
Angell says he believes more new businesses would survive if the founders kept the business and their personal life separate. "It's a major stumbling block for lots of businesses.
"We've got this current scenario now where self-employment is more popular because people have come out of scenarios that haven't treated them well or have been made redundant, but you've got to be passionate about it."
Consistency is also the key to success, he says. This can mean the difference between gaining a regular or occasional customer.
Strong people skills and knowing how to manage stress levels, along with old-fashioned hard work, are other qualities common among successful business owners, Angell outlines in his book.
He says you'll never work harder in your life than you will in the first three years of establishing a business.
John Angell, author and former chartered accountant. Photo / Supplied
Business Mentors chief executive Sarah Trotman says business owners need to look after their own mental health if the business is to succeed or reach its full potential.
She recommends that owners and managers forecast and plan for a few operating future scenarios in the event of unexpected disruption, such as a global pandemic.
"For example, think about; 'If I lost my biggest supplier or my biggest customer, what are the things that could potentially go wrong in my business.'
"'If we went into another lockdown, what impact would that have on my revenue'. If the borders stay closed for another year, what impact will that have on my business as an exporter.
"Being honest with yourself about where your business is at is very important," says Trotman.
She recommends that small businesses liaise with trade and sector associations that are often working with Government about macro issues, and councils charged with economic development in the region, and to stay in close contact with your accountant.
Businesses should always been continually developing their products and services and improve operations to make them more efficient, and have a rainy day fund, says Trotman.
"Be careful not to commit to long-term contracts like visas, negotiate everything and get a mentor ... entrepreneurs are often the people who are living in the future and are very optimistic, but a business mentor helps business owners keep their feet firmly on the ground and focused on reality."
