New companies in Lithuania are sprouting by leaps and bounds. Sadly, not all of them enjoy success. Freshly baked businesspeople, filled with plans and determination, often overestimate their abilities. That is was causes numerous problems which pose threats to the continuation and growth of any business.
First of all, you need to carefully consider your financial capabilities and avoid rushing to take out a loan as soon as you’re a bit short on cash. It’s worth remembering that banks are also businesses and their goal is profit. When providing you with a loan, they seek to gain, therefore their main objective is not to help you but to profit from interest.
Fluctuations in cash flow are normal in young firms, so you should be prepared for them. Income might not only fluctuate but at some point even significantly decrease, but that shouldn’t affect the way your company functions. To ensure that bills are paid and all necessary services continue, have the funds required to cover all business costs prepared a few months in advance.
There is a popular myth that consumers nearly always buy the cheapest product or service available. Expecting quick success, most business novices set their prices particularly low but unfortunately don’t achieve the desired success. In order to increase profit, it is worth to, instead of cutting prices, release fewer more valuable products. Spend more time and effort to ensure quality and you will be able to offer, perhaps not as many, but more competitive and profitable goods or services.
In some cases, once a viable source of income is found, all the time and energy becomes concentrated into the single product that seems to be bringing success. However, clients and their needs constantly change, so you should be ready for change as well and never sit still. Keep looking for new sources of income, experiment with your products and services, and look for new solutions.
Expanding Your Staff
For a young business, hiring new employees is an investment that has to pay off. If by hiring a new worker you are investing time and money into something other than your main area of business, make sure that it will be profitable. E.g., is it really necessary for a small company to have a person sitting in the full work-day just to take care of its finances, given that they will cost you various additional taxes and unexpected expenses? If you decide that it isn’t something you can afford, you can instead buy the needed service from a specialized company.
When hiring new employees, it’s often expected the company’s growth to be immediately reflected by increased income. Unfortunately, that doesn’t always happen. Therefore, if you are experiencing trouble, expanding your personnel is not the best move. Although believing in your success is important in business, you should avoid blind optimism and turn towards a rational realist approach.