Business can be a risky thing for many reasons. A lack of planning can see a start-up fail before it has started up. Annoying customers can lead to a lack of income. A lack of income can derail a business and turn any sign of success into failure. But business doesn’t have to be risky business, no.
Many businesses operate on unsteady incomes. For a prime example of that, take freelancers and designers who charge invoices to clients. These invoices might make up all, if not most, of a freelancers income. Most clients pay invoices bang on time and do you know what, that’s great! Some clients might have other priorities though and might not meet payment terms often. For a freelancer, that can be a huge problem.
For any business that relies on invoicing, it can bring insecurity to mind – the invoice has been sent, the work has been done – but the cash isn’t there. Frankly it’s an unsustainable business model for that to happen, but it does and it is because of circumstances out of the workers hands. That being said, you need to work to the situation at hand and not the hypothetical best case scenario, which in this instance simply does not exist at all.
If a freelancer spends on the basis of invoices that haven’t yet been completed by the client – it can be a huge issue. What if the client never pays up? What if bankruptcy is declared and the invoice is never fulfilled? In these circumstances, it might be your invoice that sits at the bottom of a steep list of creditors – which might mean you won’t see your money – ever.
If you spend that invoice and don’t see the cash, you’ve made a gamble. Big mistake. You need to think these things through and seek alternatives – debtor finance – for example. It’s not your fault, no, but businesses cannot be run on pure assumptions. Always consult the spread of options before you before putting it all on black…
Gambles in business shouldn’t factor into anything you do. What could be seen as a gamble? Any move without the backing of hard facts and data! For instance, if you are looking to move premises without taking into the key considerations such as why, how and cost – you could be setting yourself up for business disaster! Every move you make in business needs to be grounded in reality, and not hypothetical situations. If you make decisions that cost, it could be a bigger expense than you initially thought – and that could sink your business. Another example would be in the hiring of employees – are you hiring to fill a need in your team or are you expanding your payroll for no reason? These ungrounded moves are going to lead you to disaster if they are made recklessly and often.
Every move you make in business needs to be grounded in reality, and not hypothetical situations. If you make decisions that cost, it could be a bigger expense than you initially thought – and that could sink your business. Another example would be in the hiring of employees – are you hiring to fill a need in your team or are you expanding your payroll for no reason? These ungrounded moves are going to lead you to disaster if they are made recklessly and often.
There’s no excuse anymore and data is available in all forms from income to production statistics. The foundations of plans lie before your very eyes and if you are making big business moves without consulting the truth, and the facts – you might not be in business for long. Don’t bet your bottom dollar in business, because it could be the last mistake your business makes.
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