If you’re planning to start your own business and feel prepared, you know what your product or service will be and have probably written a business plan in some form. You’ve worked out your pricing structure. You may also have a premises selected if your business isn’t home-based. You’ve thought about your customers and how you will reach them, including through social media and advertising. However, there are several other ways in which you need to prepare for your new role as an entrepreneur. Time management, building support, healthcare and cash flow are all areas that new entrepreneurs do not always consider carefully before making the leap, but doing so can make the difference between success and failure.
Time Management
Just because you’re the founder doesn’t mean that you can do everything. Ineffective time management can lead to burnout and sink your business. However, managing your time effectively as an entrepreneur is not as straightforward as getting the right tool or planning well. You need certain skills and support. One of those skills is delegation. Figure out the tasks that it isn’t worth your time to do and pay someone else to do them. In addition, figure out the tasks that you aren’t very good at, and pay someone to do those as well. For many, financial and legal concerns fall into this latter category.
Having an accountant, a bookkeeper and a legal advisor on call can save you both time and money in the long run. Because you’re an entrepreneur, effective time management can also bleed over into your personal life. This might mean outsourcing housekeeping and meals as well. According to Hampr, outsourcing your housework is on the rise and it’s a way to buy back time that you didn’t already have. It could also mean leaning on a partner to shoulder the load for those things, but if you do have a family, you’ll still need to make time for them as well. For example, many successful business owners have unbreakable rules about being on hand for family dinners or children’s bath times.
Build Support
This is related in some ways to time management because with more support, you’ll be able to delegate and call in help when you need it. However, building support isn’t just about what to do when you’re stretched thin. It’s about the long term as well. For example, finding mentors can help build your professional skills and avoid mistakes that occur because of inexperience. You can also learn a great deal from peers and colleagues, fellow business owners in your industry and different ones, who can share their challenges and tips.
Support from friends and family is important as well. This can be as basic as family members understanding that when you are working from home, working is the operative word. You aren’t available to do chores and run errands. However, it’s also important to have that support in a larger sense. It helps to have family and friends who understand that you may sometimes have to work long hours or miss a holiday. At the same time, you need to cultivate those relationships and avoid using your new business as an excuse to neglect them. Overfocusing on your business to the exclusion of everything else is another mistake that can lead to burnout.
Healthcare
How will you cover healthcare costs? Figuring this out can be overwhelming if you’ve always relied on a health insurance plan from your workplace. In fact, it’s possible that even that plan might not have been as comprehensive as you assumed it was, and as you begin looking for something to replace it as an entrepreneur, you might struggle to find the coverage that you need. The fact is that the situation isn’t much better for health care providers, who are struggling with the cash flow issues that result from reimbursement that arrives at unpredictable intervals.
You might be looking at plans for yourself and your family that only have high deductibles or that require co-pays and out-of-pocket payments that will make it difficult for you to get the treatment that you need. There is some good news. A growing number of providers are offering flexible payment options. With healthcare financing offered by companies like RepeatMD and Cherry in the form of payment plans, you may be able to manage the high cost of healthcare as an entrepreneur with or without insurance.
Cash Flow
Cash flow can be a real problem for small businesses. In theory, there may be a substantial amount of money on the way, but you might be struggling in the meantime to keep up with bills, payroll, and other financial obligations. The obvious remedy is to have plenty of money on hand, but unfortunately, unless you are independently wealthy, it may not be as simple as that. You should certainly start with a cushion, but that can be quickly depleted over a few bad months. Similarly, invoicing promptly and following up regularly is also important, but it won’t protect you from people who simply refuse to pay in a timely fashion.
Another important strategy is careful tracking of all your spending. It’s difficult to overdo this. The more you know about where your money is going, the better you can control it. However, you should also consider having emergency backup plans in place if all the sensible precautions above fail. A line of credit can help get you through tight times. Depending on your industry, there may also be some forms of insurance you can purchase to protect you against cash flow issues.
For example, business interruption insurance can protect you if the cause of the cash flow problem is a flood, a fire or a similar disaster. You may also want to look to a type of insurance known as debtor, accounts receivable or trade credit, which can be useful in some industries at protecting against unpaid accounts. If cash flow is a consistent problem for you, then it’s time to look at the bigger picture. There may be issue with your pricing, the quality of the goods or services you’re offering, or even the goods or services themselves.
