By Beatrice Bartlay, Founder and Managing Director of 2B Interface, a temporary and permanent staffing agency.
The UK economy is gradually emerging from the recession but small businesses are set to face a tough financial year in 2011. The VAT increase is likely to put a strain on small businesses, as they must account for extra administration costs. It is therefore vital that business owners have the appropriate mentality and positive attitude required to make their businesses successful.
Perseverance, consistency and determination are essential traits for a Managing Director to have. If he/she has confidence in their business, potential clients will too.
To place themselves in the strongest position to win new contracts, new business owners should attend networking events and promote their services and raise their profiles. A SWOT analysis, is key to any business plan: strengths, weaknesses, opportunities and threats within the relevant market should be acknowledged by the business owner.
Small businesses can face major obstacles, such as:
Budgeting is essential, and business owners need to calculate how their finances will be distributed within their businesses. Renting office space can be one of the most expensive overheads so owners should research the most affordable option. They need to ensure that they budget for the installation of IT systems. A back-up source of revenue is also strongly advised.
Not preparing for the unexpected
Managers should take into consideration any unexpected overheads and take expert advice from their banks. Business owners need to have an honest relationship with their bank managers. Sometimes these good relationships can help when businesses require advice or a loan.
Not focusing on the big picture
Small business owners can lose sight of long term goals and sometimes they only focus on achieving small successes. Business owners should always be thinking about how to grow their businesses and make them more successful.
Insufficient time management
Deadlines must be met and the best way to ensure this happens is, firstly, to prioritise what is most important, and secondly, to set aside time to develop new business strategies.
As predicted by George Osborne, more private sector jobs will be created, to compensate for the decline in public sector jobs.
Many small businesses will encounter financial obstacles which can be avoided with the correct planning and budgeting. Inevitably, most businesses will have to face unexpected obstacles at some point. However, if business owners have the right mentality and optimism, their business is likely to succeed.