You have an excellent business idea, innovative and which fills a need in the market. You have the enthusiasm and determination to work and make it flourish, that already sets you on the path to success, correct? Not necessarily, since there are many factors that you must consider so that they do not affect the success and progress of your business. Here you will find several steps to avoid falling into those factors that can affect your business, so that you can take the necessary steps to prevent this from happening.
Businesses are susceptible to both internal and external factors and changes, although there are many that are not under our control, but others are. Examples of external factors, which are not in our control, are situations like those we have experienced in recent years such as a pandemic, natural disasters such as earthquakes and hurricanes, and the local and global economy.
However, the internal factors that can affect your business, and over which you can have control, are:
- Lack of financial planning- It is important that every business has financial planning that supports its development. Planning can help you organize your income, expenses, and savings through an annual budget. Having solid financial planning can also help you deal with external factors that may arise given that you would already have an emergency fund identified.
- Poor financial practices and poor management- For a business to grow and develop, it is important that you manage it correctly. You cannot make unnecessary expenses when you have other priority expenses such as paying payroll, rent, utilities, insurance, among many other financial commitments of a business. If you don’t have management skills, seek help from an expert.
- Lack of experience- The best business idea can become a total failure if you do not have the experience to run a business or the experience in the field in which you are offering a product or service. To develop a business you must know in depth all parts of it, you must be the expert person. Likewise, to run a business, you must have the appropriate experience. To avoid failure in these instances, you must train yourself properly and seek the guidance of an expert to support you in the process.
- Lack of capital- Starting a business often requires an initial investment as well as additional investments during the course of its development. To obtain capital to develop and operate, there are several options from getting investors to contribute to your business to obtaining loans and lines of credit that can support your development.
- Not having a defined growth strategy- Many times businesses survive on a day-to-day basis, without drawing up a development plan for the business. It is important to identify short, medium and long-term goals and develop strategies to obtain them. This can cover various aspects of the business, from the financial aspect to others such as marketing, advertising and public relations. As in the other situations mentioned above, it is very important that you train yourself on these topics and seek help from experts in these matters.
In general, all of these aforementioned factors have two elements in common: planning and proper management of your finances. In order to steer your business from the beginning, in the right direction, it is extremely important to develop a budget and stick to it. Next month we will explain the importance of developing a budget and the basic steps to do it.
If you are interested in applying for any type of financing for your business or need help or guidance with any financial aspect, remember that at Oriental we are more than ready to serve you. Visit orientalbank.com.
