More Advice on running a company

Following on from my post How to run a small company in Australia, here is some more business advice, in no particular order:

  • Keep an eye on cash flow. It can be great to send off thousands of dollars of invoices, but if you don’t have the money today to pay suppliers (or employees) then you’ve got a problem. People don’t like being paid in promises, they prefer cash. I feel very uncomfortable if I have less than a full month’s expenses (including wages) in the bank. I like having two or three.
  • Know the failure rates, and plan accordingly. My business is now almost three years old, and it’s only now that I’m starting to think “you know what, I might just be able to make this work”. A source of mine at the Commonwealth Bank says they see 70% of start up businesses fail within the first year. From my point of view, one of the key success factors is not to dream big before you’re capable. Don’t buy into the Silicon Valley mindset of buying brand new Aeron chairs for every staff member, when you don’t even have a single client (or a product/service, even). Doing so is a guarantee of failure, in my opinion.
  • Ideas really are worthless, and implementation of them is a lot harder than you first imagine.
  • Time management is important, and difficult. “Work” as such never really stops, and work hours are unpredictable. I sometimes start at 7:30am, and I’m quite often working at 10:30pm. On the other hand, sometimes I will work only a couple of hours a day and then go to the beach. But one thing is constant: worrying about the business. Worrying about client work, worrying about bills, worrying that my staff are happy, and so on. I’ve spent a lot of time learning about time management, and I might go into this in more detail in another post, but the key is this: fill your schedule up with big rocks.
  • Ask for help before you need it. Get all the advice you can. Not all of it will be good (indeed, some of it will be awful), but pick out the good stuff. Get advice from your bank before they need to bail you out, they’ll be much happier.
  • If you’ve got multiple directors and/or senior staff, think about who has access to bank accounts.
  • And the most important thing: starting my own business is the most exciting thing I’ve ever done. If you have the inspiration and the opportunity, do it. If you don’t have the opportunity, try to make the opportunity happen. Business ownership is an amazing feeling.