Starting a new business in 2021? While this is an exciting time for you, the pandemic, alongside looming economic uncertainty, means there are lots of considerations to make before pushing ahead with your passion project.
To succeed where many startups fail, you’ll need to avoid the pitfalls plaguing small businesses. And you must be cautiously optimistic in the year to come. Here are the following key considerations and industry hacks to help you on your way.
- Apply for a Business Credit Card
- Invest in Tools to Streamline Your Operations
- Decide How You’re Going to Raise Startup Capital
Read on for financial and tactical advice for starting your business during the uncertain year that is 2021.
Apply for a Business Credit Card
As of 2019, 21.5% of startup businesses failed within the first year, which extends to around 50% after five years. Poor planning and financial management are often the reason behind these two statistics.
No matter how stellar your business idea, rarely is your startup so in tune with its niche that you can float above your bottom line without effort or sustainable cash flow.
Substantial running costs are almost always to blame for a startup’s failings. So, it’s important to learn from past errors, avoid this common issue, and think ahead when it comes to managing your business.
Looking for an actionable solution? One way to avoid this pitfall is to maintain cash flow using a small business credit card. This may help you establish a more flexible method of repaying your running costs.
When talking about small business credit cards, some owners swear by the cashflow benefits. Others avoid them because the risks feel too costly. Therefore, it’s important to understand whether your startup is suitable for such a responsibility.
Think small business credit cards are the way to go? Here are some of the benefits they provide your startup:
Like most credit options, business cards come with ups and downs. Here are few factors to be wary of when applying for a small business credit card:
Small business credit cards provide your startups with much-needed flexibility, especially in the early stages of its existence. But understand this comes with some added costs. Use your newfound credit with responsibility and always settle your debt before rates get out of hand.
Invest in Tools to Streamline Your Operations
Feeling as if you’re wasting time, or maybe unnecessary costs are flying under the radar? Modern business is fast-paced and ruthless, meaning it’s important to streamline your startup without sacrificing quality service.
Startups come in all shapes and sizes. And these time-saving tools streamline operations well in two different industries:
Small Business Fuel Cards Monitor Important Logistics
Throughout the pandemic, some businesses are busier than ever. Much of this is from the benefit of online stores. So, many operations still need to think about getting products into peoples’ homes.
To meet rising demand and keep supply chains moving, many startup operations are having to adopt home delivery systems while looking at ways to cut costs.
And what’s more costly than fuel? Rising and falling in line with the world economy, fuel costs are a volatile expense many new transport dependent businesses are learning to navigate around during unprecedented times.
One popular solution is to adopt fuel cards–a credit card used to pay for fuel which can save your startup time, money, and effort. Fuel cards are helpful tools for small companies because they act as a cost-effective way to control fuel usage via telematics data, without having to invest in AI like UPS (and its ORION system).
Despite fuel cards not applying to every business, many startups can use tools like this to gain an advantage over more established competitors. This is an important lesson to consider in whatever industry you’re looking to enter.
Use Cloud Storage to Simplify Team Collaboration
Transport isn’t the only industry where new businesses can use small (but effective) tools to function optimally. On a more general note, the pandemic flipped office work on its head. But as new kids on the block, startups are adopting the work from home environment with fresh optimism.
Remote working isn’t unchartered territory anymore. More entrenched businesses have had a year to trial this method like canaries in a coal mine–so take note of what has worked and what hasn’t.
For example, many businesses find working in isolation detrimental to team collaboration: communication feels forced, internet connections are unstable, and people’s bedrooms can be more restricting than comfy ergonomic desks.
The solution? While the odd Zoom call boosts morale and provides some much needed human interaction, you also need to extend larger business infrastructure into people’s homes without invading their private life.
Many companies are embracing task management software like Asana into their remote working toolbox–an online calendar that improves clarity and boosts accessibility away from the office.
Task management software is improving internal collaboration by organizing tasks and showing employees where their work fits into the bigger picture. That’s ideal for startups because transparency and accessibility are key to guiding new employees.
Decide How You’re Going to Raise Startup Capital
Got your startup plan at the ready, but have no idea how to get the thing off the ground? Starting a business is an exciting prospect until funding becomes a sudden roadblock rather than a distant hill.
Raising capital is a big worry for many aspiring entrepreneurs. However, methods of funding are more plentiful and accessible than ever before. Here are a few routes to consider if your savings aren’t quite covering startup costs:
- accelerator programs, these initiatives are designed to support, grow, and establish your startup by working alongside experienced mentors who see promise in your business idea.
- Crowdfunding either allows the public to invest in your startup, meaning they receive a small stake in the business–or contributions are treated as donations (just make sure you have a great pitch).
Most startups require some form of support to get the ball rolling. Once they do, the sky’s the limit. Don’t turn your nose up at helping hand, especially when numerous avenues can boost funding without undermining your ownership.
Starting a new business in 2021 isn’t easy. If you have confidence in your passion project and make the right considerations, then you have every chance of succeeding–but remember to be cautiously optimistic as you venture out into this uncertain year.
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