Starting A Business? Tips On How To Avoid Business Debts And Bankruptcy*

*This is a collaborative post*

If you're contemplating starting a business then you'll need to plan for every possible outcome including how to avoid business debts and bankruptcy. Below are a few tips which I found to be of use when starting up my own business which I think are crucial and apply to any business start up - regardless of scale. 

Requirement Number One; Use Social Media And The Internet To Your Advantage 

One of the major upsides of social media and the internet in general is that it has enabled ordinary people - like you and me - to set up in business. I call it the 'commercialisation of the self', and now it is easier than it ever has been to start your own business. 

Firstly I would like to iterate what I mean by this transition, the 'commercialisation of the self.' The internet offers us all the opportunity to utilize a platform such as Twitter, Blogger or Wordpress, to showcase and market any skill we might have. For instance, many people with culinary or baking skills have made successes of themselves through the marketing and sale of their products via online mediums. Heck if your skill is in doodling and drawing, there's opportunities for you to upload and sell your drawings to a global market within just a few clicks on sites such as Etsy. 

If you have a skill or talent then there is ample opportunity for you to advertise and market your wares, skills or services. One of the biggest upsurges in the entrepreneurial waters is the emergence of freelance writers, bloggers and all kinds of content writers. This is thanks to the relative ease with which one can now set up in business. 

Requirement Number Two; Hard-Work

Firstly let's just clear one thing up, unless you are extremely lucky, no business will ever succeed without hard work. Anyone can become successful, but only with sheer graft and dedication. There is no magic formula and no substitute. You will have to put the time and effort into building up your business and online presence. 

If you want to become a freelance writer for example, then you'll need to think about the audience you wish to target and put in the hours researching as well as creating unique content. In the majority of cases where a business fails or goes bankrupt, they do so within the first twelve months. The reasons for this are infinite and varying but one of the key contributors is that it is a bigger undertaking than people assume. Starting up a business and the work load which comes with it is a shock for many people. There's no such thing as a '9-5' once you take the entrepreneurial path. 

Lots of people read the online business success stories and think that it will be easy. It is not. I know from experience that it was a steep learning curve for myself when I set up my first business at the age of nineteen. I'd like to know who coined the term; 'being one's own boss' and I'd like to find those responsible for the fact that whenever this term is said or is mentioned, it is done so as if to insinuate some form of positive emotion. 

In my experience being one's own boss comes with so many responsibilities and pressures which people like to gloss over. If you are contemplating starting out as a freelance writer then you need to know that you'll be spending many hours each day and night stressing, writing content, trying to think up ideas for content and networking until your fingers are blistered or bleeding from the constant 'tap, tap, tap' on your keyboard. You'll also have the stresses of dealing with financial matters and filling out your tax return at the end of each financial year which of course can be daunting for many new business owners. It's not all doom and gloom though, as scary as this can be, help is always at hand if you look for it in the right places. 

Speaking of doom and gloom, not to put you off but there's a high chance that at some point you'll also have to deal with rejection. Although this is just a part of life in general, you'll need to develop a resilience and thicker skin. It goes without saying that when you put yourself out there in a position to have your work or creations scrutinised by perfect strangers, that you'll also have to deal with some level of criticism. For any budding authors reading this who might have a lack of confidence due to previous knock backs, all I'll say is look to JK Rowling as a fine and mighty example of someone who simply would not take no for an answer. As has been well documented, her first Harry Potter novel was rejected by numerous publishers before she was taken on. The motto? Stick with it. Sometimes it pays to be tenacious. 

Requirement Number Three; Seek Advice And Conduct Research

There is a plethora of information online, take your time to do careful research and to get advice from various different people. A big consideration for anybody getting a dose of the entrepreneurial 'bug' is finances. It is so important for you to seek out as much financial assistance as you can in order to feel confident and comfortable when moving forward. There are an extensive amount of websites and companies which can provide crucial advice in such matters such as Hudson Weir Insolvency PractitionersThere are also free government websites which can offer free financial advice as well as information relating to the actual process of starting a company and registering with Companies House etc. 

Perhaps also ask family or friends for pointers and take advantage of any online communities and/or Facebook groups. Many of these groups are set up so that like-minded people can connect and can lend support. Remember that many individuals from these online communities will have 'been there and done it,' and as such their advice is pivotal as they'll be sharing from experience, and nothing in my opinion beats experience.

Another key aspect of setting up in business is to make sure you are strict and stick to budget! Creating a budget which will allow your business to endure any slow or rough patches in that first twelve months is crucial.

One of the main advantages of choosing freelancing as a career is that the start up costs are very low. So long as you have a good business plan, a vision in place and low running costs, the only other factors you'll need are hard work, time and dedication. You should be able to reach a level of profitability fairly easily. 

Just remember that many businesses fail because they hit a bad patch and the owners panic and think that by throwing money at the situation they can save themselves, but in reality all they do is dig a bigger hole. Panic solves nothing and as the saying goes, look after the pennies and the pounds will take care of themselves. 

*Written by Michael David

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