Starting a small business in Exeter that will stand the test of time

Over recent years, Exeter has steadily built up a solid reputation as an entrepreneurial hotspot for those who want to cut the shackles of paid employment and strike out on their own. Most people go into a new business venture with realistic expectations knowing it will take drive, determination and great planning skills to successfully get their new startup off the ground.

However, as any airline pilot will tell you, taking off is one thing, staying airborne still requires focus and attention from the cockpit. Like any newborn, a business is at its most vulnerable during the first year of its existence. Here are some tips on navigating those opening 12 months.

Manage your outgoings

To maintain the aircraft analogy, getting off the runway is going to burn lots of fuel, but as takeoff is complete, it is vital to throttle back. Running out of cash is the biggest threat to a new business, and the most common reason for one with a full order book and a host of happy customers to nevertheless go under.

Ensure somebody, whether it is a trusted finance manager or an external accountant, is constantly keeping a close eye on cash flow, and adopt a principle of spending only on the things your business needs, not what you think it ought to have.

Control growth

Your business plan almost certainly incorporates some ambitious growth plans over the first year, and rightly so. Generating more revenue and increasing the customer base are both core to ensuring the business becomes robust and has a secure future. However, that growth has to be carefully controlled.

Remember the value triangle, which states that customers are typically focussed on price, speed and quality. If growth hampers any of these metrics, customer expectations will not be met, and your overall value proposition will suffer.

Understanding the risks is the first step towards preventing them. The second is to implement measures such as an MRP system to ensure that orders are processed in a logical way and that your business has the ability to scale up without the supply chain collapsing under its own weight.

Keep measuring

A business plan is vital, and should be at the heart of everything you do from a strategic perspective. But at the same time, it should not be set in stone. Measure everything you can, from the financials to customer feedback to inventory to online traffic and conversions.

Don’t just assume the business is going to evolve in the way the business plan predicted, and be ready to adapt in order to do more of what is generating the most business and less of what is not.

Manage your expectations

The majority of new businesses do well to break even in their first year and some can take 18 to 24 months to become profitable. Manage your own expectations, and accept that there is a long road ahead. Look after your customers, manage your costs and keep on adapting to the commercial environment, however, and it will all be worth it in the end.