Common mistakes to avoid when starting a business

Financial planning is extremely important for most new businesses. A lack of capital, lack of a contingency plan and reluctance to seek professional advice can all bring major problems.

Business capital

Sufficient capital is essential for the survival and success of your business, and is a primary indicator of your business' health.

It is important to create a high-quality business plan to attract and secure the right finance for your business. A business plan can:

• outline your business objectives and how you plan to achieve them
• be used as a tool to structure the financial side of your business
• be updated and changed as your business grows
• help to provide realistic expectations for what the business can deliver

For more information, see write a business plan: step-by-step.

Contingency planning

Without a contingency plan you can leave yourself exposed to the unexpected.

Situations beyond your control that may impact on your business and cashflow include interest rate rises, transport strikes and political instability. While your business can survive periods where there are no sales or profits, it cannot survive without cash. Building up cash reserves will ensure that you can trade effectively and develop your business.

For more information, see cashflow management.

Professional advice

Failing to seek professional advice will make any financial troubles worse. Few new business owners can claim expertise in all areas of their business. Using an accountant or financial adviser can help you ensure you borrow and manage money cost-effectively.

For more information, see choose and work with an accountant.

Enterprise Northern Ireland supports entrepreneurs to help them start, grow and develop a business - find your local enterprise agency.