Adapted from Starting a Business For Dummies

Running your own business calls for a well-rounded range of expertise. In the early morning you may have to be coach and trainer to a new employee; by mid-morning, coffee-break time in big business parlance, you'll be negotiating with the bank for an extra line of credit; mid-day will be spent drafting a marketing strategy; the early afternoon could be spent looking for suppliers for a new product you are thinking of launching. The late afternoon could find you delivering a rush order to a key customer followed by a quick shufty around a competitor's premises and a couple of possible premises for you to move into if you grow as planned. The evening is devoted to drafting a job advertisement and a leaflet, leaving the weekend to get the books up-to-date and the VAT return done.

Take the time out before you start up to brush up on the range of skills that you are going to need. There are now more opportunities for education and training, at every level, in the small business and management field than ever before. No formal academic qualifications are required for most of the courses and costs are generally modest. In certain cases, participants may be eligible for grants or subsidised training. The bulk of the activities are concentrated in universities and colleges throughout the whole of the UK. However, there are a growing number of opportunities for the less mobile to take up some form of home study in the business field in general, and small-business opportunities in particular. With the growth of the Internet it is now practical and worthwhile for UK-based entrepreneurs to get their learning experience from virtually any part of the world.

Underestimating Start-up Time

Everything in business seems to take longer than you think. Premises take ages to find and even longer to kit out and be ready for use. If you start up before you are ready there is a good chance customers will be disappointed and rush around sharing their displeasure.

Make a chart showing the key tasks that have to be carried out before you can start up your business in the left-hand column, with the timescale in days, weeks or months, as appropriate to your business, across the top of the chart. In the right-hand column show who is responsible for each task.

Draw a bar between the start and finish date for each key task, showing how long the task will take. Some of the tasks will overlap others and some will be dependant on the successful completion of earlier tasks. For example you can't install the oven in a restaurant until you have found the premises and signed the lease. You can, however, research oven suppliers and negotiate the price and delivery. Use the chart to monitor progress and take corrective action as you go.

Mistaking Cash for Profit

The cash that flows into the business hasn't had any of the automatic deductions knocked off it, as has a pay cheque from an employer. So the money that comes in is 'gross' cash flow. It may be real cash, but it is not really yours, or at least not all of it. There may be a temptation to use this cash to maintain your living standards, but don't yield to it. When the bills come in becomeemdash from the suppliers, for National Insurance, for VAT becomeemdash as they inevitably will, you may be stuck for the cash to pay them. The Inland Revenue and Customs and Excise put more businesses into liquidation than anyone else.

Maintain a cash flow forecast on a rolling quarterly basis. In that way you will always have a one-year view as to what is likely to happen to the cash in the business. Use the cash flow projection to anticipate peaks and troughs in cash flow.

Use a spreadsheet and either write the program yourself or use the template that comes with your accounting software. Manual cash flow systems are inefficient and discourage regular updates. On the other hand spreadsheet updates are simple, efficient, and free of arithmetic errors, at least.