I was reading an article in Forbes recently that says that 9 out of 10 businesses fail, working with so many successful clients I find this statistic really hard to believe, that’s a staggering 90% of businesses and most of these failures being in the first two years.
At TI Accountancy a large percentage of our new clients are new businesses, I love getting caught up in their eagerness and excitement, finding out their business concepts for their new adventure and giving advice on the best ways to ensure their paperwork is an asset to their growth rather than a chore that becomes a weighty burden if left.
Knowing your numbers as a new business is a vital part of growth, you need to know that each product/service you are offering is making a healthy gross profit that can cover all your necessary overheads.
The article also mentioned that Business longevity was relative to the failure and the longer the business had been trading the less likely they were to fail.
This made me think about the companies we work with that have been around for a decade or more and what they did differently to other companies, what struck me was that all of them planned and reviewed.
They all had annual budgets, plans, forecasts that didn’t just sit in someone’s draw for the year but they were reviewed on a regular basis to make sure the company was on target. Now I’m not saying these detailed plans were what they had back in year 1 and 2 but I would guess that if I asked these analytic business owners they would be sure to have had some form of written down plan back in those early days.
Like Alan Lakein’s well known quote above: “Failing to plan is planning to fail”
By writing down your goals for 2017 and reviewing them (and by that, I mean putting in the hard work to achieve them) I reckon you’re well on your way to being one of the successful 10%.