Like most people, I started my small business with a lot of hopes and maybe too much confidence. I projected starting to make a profit in my start up very quickly.
The confidence came from many years experience working for somebody else in the same field. At the time I did not realize that this experience can also prove to be a huge disadvantage rather than an asset.
A disadvantage because I hated my old boss with a passion and the way he run his business by being very strict with his staff. And so I decided to treat my workers a lot better and to give them plenty of room to develop and hopefully be highly motivated to achieve high productivity because I treated them well.
This was my first mistake. In starting a small business close supervision of your staff is very important, especially in the initial stages as you launch your business. People are different and I quickly discovered that not everybody is like me who works best with minimal supervision. Your workers are one of the most important key aspects of your small business around which failure or success will hinge.
I am from Croatia, a country that heavily relies on tourism. Actually the sea is the main source of income for most people because sailing in Croatia and the beach activities brings in a huge part of our national income. I decided to go in a different way and start a business that has nothing to do with tourism and it it is an added difficulty to a business if you are from Croatia because everything is tourism oriented and not much else can profit.
People are not motivated only by how you treat them. It is important to work out a careful plan well before you launch your business on how to keep your people motivated.
Looking back now I can advise you to not only keep a very close eye on your workers but to also make it very clear what is expected of them. Setting daily targets of what they must accomplish is very important.
When I worked for somebody else my strength was in sales and marketing. And so I assumed that I would be able to transfer these skills to greatly benefit the small business I started. I was mistaken. In my old workplace somebody else worried about all the other key aspects of the business and so I was able to focus on my area of expertise and thrive.
In my small business it was very different. There were a lot of other issues and small details to worry about making it impossible for me to really focus on bringing in the customers. Looking back I would have been much better off hiring somebody to either run other aspects of the business while I focused on selling. Or I would have focused on selling and found somebody else to run the other key areas of the business under my close supervision.
Financial planning and cash flow
The other huge mistake I made was that I had never taken finance as seriously as it should be taken. The result at my start up was that we often ended up in a situation where we hardly had any cash and yet we had sold a few items to customers who were slow in paying.
Careful financial planning and control are extremely important for a start up. Even one that starts with more than enough funds in capital like I did. And especially cash flow where you ensure that customers are paying on time.
Conclusion
The experience of starting my own business ended up being a very emotionally draining affair, more so because the business failed and I was left holding huge debts that I owed to vendors. But I guess I am much better prepared for the next time and hopefully you are better prepared learning from my experiences in this article.