Firstly, congratulations if you have just purchased a business, this is such an exciting time for you. And it's also very exciting for everyone that works in the business. Even the suppliers and customers that interact with the business will be watching closely. We hope our tips on negotiating effectively and on how to move the sale along quickly came in useful.
So now that you own a business, we want to share with you the top five top mistakes that new business owners make.
As a business owner I know that I’m going to make some mistakes along the way and also working as a business broker we regularly observe the mistakes that others make.
Between ours and theirs here are some of the ones that stand out as being the most essential, and we hope that you are able to learn from the mistakes of others so that you can get off to the best start possible with your new business.
The first mistake is they don’t write a business plan.
A good business plan is really essential to a sustainable business. It should contain you goals and how and when you plan to accomplish them.
The second common mistake is they make big changes too quickly.
Very occasionally this is necessary, though if you have paid fair value for goodwill – don’t be tempted to rock the boat that already floats. Remember the business may have taken years to grow its goodwill, so settle in first and enjoy the spoils of what you have purchased.
The third mistake is they don’t work off a cash flow forecast.
A cash flow forecast is not the same as your profit and loss statement. A P&L does not calculate your net cash flow position. If you don’t know your net cash flow position, the strategic decisions you need to make along the way will be made blindly.
The fourth mistake is they assume they know everything.
You don't know what you don't know! Not asking for help at a time they need it most can be really damaging. In so many cases we see this because of pride or ego, and from time to time we see new business owners just haven't recognised they are in trouble.
The final mistake we see new business owners make is how they manage employees. The reality there is always a chance an employee will leave when the business changes hands. Always try and start the business with back-up options and remember your role as the business owner is a priority, don’t replace employees yourself.
Good luck, in your new business, and please share this with anyone you know who is a new business owner.
From all of us at Vision Brokers and Advisors really look forward to working with you.
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(t) (02) 8923 2632
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(t) (02) 8923 2632