Issues for start-ups/small businesses

toobeyshaw

Hi,

I was wondering if people could share their thoughts on what they see the biggest challenges faced by start-ups/small businesses in Ireland today? I know that getting finance from the bank is a big one but I am thinking of things like;

-> Understanding financials
-> Finding out information on how to start a company
-> How to manage cashflow
-> Trying to manage a business and all that it involves as one person trying to do everything

Has anyone experienced issues in these areas or others?

Thanks.

Graham

Do the 600 pages of threads not give you anything to work with?

Gloomtastic!

The three most important things for any new start-up - Cashflow, cashflow and cashflow. :P

skelligs

Gloomtastic! wrote: »

The three most important things for any new start-up - Cashflow, cashflow and cashflow. :P

In what order would you put those three? :P

Seriously, I think a lot of people think its easy. Its not. Its long hours, its making sure the cashflow is good, managing it when things go bad (my business doesn't take kindly to good weather - so I reduce stock and staff costs to a minimum in summer)

You also need someone to manage the accounts end - accountants are relatively cheap and can give an amazing amount of guidance if you get a good one. They doing the boring stuff while you do what you do best.

Expense - every penny counts. Very true in a start up business. But equally you can't be too frugal.

Bye bye holidays - for the first year anyway, be prepared to work 70 hours a week. EVERY week.

Bandara

Gloomtastic! wrote: »

The three most important things for any new start-up - Cashflow, cashflow and cashflow. :P

Weirdly enough I couldn't disagree with you more!

Some businesses by the way they operate have huge cash flow reserves, petrol stations for example, depending on volumes of fuel sold I could have 200-300k in the positive at any time.

Presents it's own problems, as in reality the margins are so minuscule that your retention amount is so small that it can be very easy to lose complete track of where you are at any one time.

Gloomtastic!

Bandara wrote: »

Weirdly enough I couldn't disagree with you more!

Some businesses by the way they operate have huge cash flow reserves, petrol stations for example, depending on volumes of fuel sold I could have 200-300k in the positive at any time.

Presents it's own problems, as in reality the margins are so minuscule that your retention amount is so small that it can be very easy to lose complete track of where you are at any one time.

In that case, you need to get yourself a treasury department.

toobeyshaw

Thanks for the feedback so far, it is much appreciated. As you pointed out Graham, there are hundreds of pages on this forum in relation to this subject area. I don't think I phrased my question correctly so you were correct to call me out on it! Basically, what I am trying to understand is the areas that people feel they need the most assistance, is it understanding the financial side, is it getting the admin done, is it lack of time etc. I know that there is tons of info out there but sometimes the more info there is, the more overwhelming it can be!

Atomico

toobeyshaw wrote: »

Thanks for the feedback so far, it is much appreciated. As you pointed out Graham, there are hundreds of pages on this forum in relation to this subject area. I don't think I phrased my question correctly so you were correct to call me out on it! Basically, what I am trying to understand is the areas that people feel they need the most assistance, is it understanding the financial side, is it getting the admin done, is it lack of time etc. I know that there is tons of info out there but sometimes the more info there is, the more overwhelming it can be!

I would say that the replies will vary vastly depending on the type of business and those running it! A restaurant might put getting good staff at the top of the list, whilst a camera shop might put increasing profit margins at the top of the list.

It will also depend on the stage the business is at, what skills the owner has / lacks, the level of available capital, etc.

So you might need to refine the question based on any or all of the above

Graham

toobeyshaw wrote: »

Thanks for the feedback so far, it is much appreciated. As you pointed out Graham, there are hundreds of pages on this forum in relation to this subject area. I don't think I phrased my question correctly so you were correct to call me out on it! Basically, what I am trying to understand is the areas that people feel they need the most assistance, is it understanding the financial side, is it getting the admin done, is it lack of time etc. I know that there is tons of info out there but sometimes the more info there is, the more overwhelming it can be!

It may be worth putting a context behind the questions. Are you thinking of starting/financing/joining/writing about......

At the moment it reads like homework/project/assignment.

Buttercake

toobeyshaw wrote: »

Hi,

I was wondering if people could share their thoughts on what they see the biggest challenges faced by start-ups/small businesses in Ireland today? I know that getting finance from the bank is a big one but I am thinking of things like;

-> Understanding financials
-> Finding out information on how to start a company
-> How to manage cashflow
-> Trying to manage a business and all that it involves as one person trying to do everything

Has anyone experienced issues in these areas or others?

Thanks.

Sounds like a college project

toobeyshaw

Hi,

To put it into context, I am in the process of starting up my business (not a college project ). The business idea is primarily corporate training but I am thinking of other areas I could expand into. In my experience, one of the things that some people have a little trouble with is understanding the finance basics so I was thinking of offering a free/cheap class in financial literacy basics as I have a financial background. I guess I am just trying to suss out whether this might be relevant. I really should have phrased my initial query better!!

pedroeibar1

I've never done a SYOB course but I'd expect all those are covered. Outside of the start-up area courses such as 'Finance for non-finance managers' have been around for decades. You will need a USP to compete with the biggies and those (i..e State) who do it for free.

toobeyshaw

toobeyshaw wrote: »

Hi,

To put it into context, I am in the process of starting up my business (not a college project ). The business idea is primarily corporate training but I am thinking of other areas I could expand into. In my experience, one of the things that some people have a little trouble with is understanding the finance basics so I was thinking of offering a free/cheap class in financial literacy basics as I have a financial background. I guess I am just trying to suss out whether this might be relevant. I really should have phrased my initial query better!!

Maybe organisational culture could be an interesting angle. How to create and maintain work ethic, participation, and motivation and avoid clock watching.

_Brian

It's hard to have all corners covered.
I was lucky to have a little seed capital to work with and cash flow hasn't been an issue.
For he the cost of getting a decent ranking website was my weakness.

For the moment were getting by with additional advertising budget but will definitely need to take the bull by the horns and engage professional web design and SEO solutions provider.

damiensw

_Brian wrote: »

It's hard to have all corners covered.
I was lucky to have a little seed capital to work with and cash flow hasn't been an issue.
For he the cost of getting a decent ranking website was my weakness.

For the moment were getting by with additional advertising budget but will definitely need to take the bull by the horns and engage professional web design and SEO solutions provider.

I think this is the biggest decision for many start-ups out there at the moment. Is it better to do it yourself or should you outsource the main functions of your business. I think on-line marketing is an area that is better when it is outsourced.

My situation is different to most as I am working full time while running my own business. I need my income to keep cashflow running through my business. Time or lack of it is the biggest issue that I face.

Obviously funding is an issue for every start-up. The competition for government money is huge and the process takes forever.

Cloudpeeps is a new service that is available in the states. I think this service will do huge business in Ireland. Using experienced managers to kick start your business on a short term contract will be of huge benefit to many start-ups.

bdo

I would go on a course about financing inventory for a shop.

It might be simple to the initiated, but if you haven't done the basics before ...

Examples of topics to be covered
- what the common approaches are in Ireland
- what is realistic to expect?
- what the key ratios you have to know about / keep an eye on
- handy daily calculators you can use to avoid getting into cashflow trouble
etc

toobeyshaw

Thanks for the feedback everyone

SeanSouth

In my mind the biggest challenge facing start up businesses and the biggest cause of failure is insufficient funding / lack of MONEY and Nothing else comes close.

To start a business you need to be properly funded from day 1. You need to have enough money to see you through the 1st two or three years
and further if possible. I see the same mistake happening over and over and over again. Business is set up on a shoe string budget and as soon as the business hits its first bump in the road, it falls apart. A new business owner needs to be creative and firmly focussed on business development. The worst thing that can happen is that the business owner spends entire days stressed out about cash flow. I would be very fearful for any business that doesn't have 100K available on day one. Anything less than 50K is a complete no no in my view.

I spend a lot of my time looking at business finances. the small businesses that have survived the recession tend to be the ones that built up cash reserves during the good years. They may be losing money for the past five or six years but the cash pile is seeing them through and they will be ready to go again when things get better. Businesses with no liquidity and low liquidity are the ones that have already failed and continue to fail. One thing that is absolutely definite for any business owner is that you will hit rough times periodically and you need to be prepared for those tough times. If you have no plan for this you are wasting your time. You may get better odds backing a horse. Be clear that good businesses are failing everyday due to under-funding.

jimmii

SeanSouth wrote: »

In my mind the biggest challenge facing start up businesses and the biggest cause of failure is insufficient funding / lack of MONEY and Nothing else comes close.

Couldn't agree more. At the end of the day this is all it really comes down to. A loss making business can stay open forever as long as it has the money to do so and a profitable business can just as easily close because it has no money. You can have the best company and the best product and best marketing but if you have no money you really have nothing.