In the business world, it is said that around 20% of businesses fail in their first year. This is often due to a lack of understanding of the basics like cash flow and financial planning.

If you’re just starting out, it’s important to be aware of these common pitfalls and take steps to avoid them. In this article, we’ll discuss some ways to keep your business running smoothly during its first year.

We’ll look at the benefits of public sector contracts and show how you can utilise these opportunities to increase your cash flow.

Why Businesses Fail: Business Basics

One of the biggest mistakes new businesses make is not having a clear understanding of their finances. This can lead to big problems down the line, so getting a handle on your financial situation from the start is important.

Another mistake is not planning for growth. Many businesses fail because they don’t have the infrastructure to support a sudden increase in demand. This can be avoided by planning ahead and ensuring you have the resources to meet your goals.

Finally, another common mistake is not building a strong team. A business is only as good as its team, so it’s important to invest in the right people from the start.

However, there may also be external reasons why a business might fail. Let’s take a look at those reasons together.

COVID-19 Pandemic

The global pandemic has been one of the biggest challenges facing businesses in recent years.

Lockdowns and restrictions have forced many businesses to close their doors, with devastating consequences.

However, the public sector has been quick to respond, with a number of initiatives put in place to support businesses.

One of these initiatives is the Coronavirus Business Interruption Loan Scheme (CBILS). This scheme provides financial support to small and medium-sized businesses affected by the pandemic.

Another initiative is the Coronavirus Job Retention Scheme (CJRS), which helps businesses to keep employees on payroll during these difficult times.

The public sector has also put in place a number of contracts to help businesses keep their cash flow up.

For example, the Department for Education has awarded a contract worth £100 million to supply laptops and tablets to schools across the country.

This is just one example of how public sector contracts can help businesses survive during difficult times.

Recessions

Recessions can be tough on businesses, especially those just starting out.

During a recession, businesses might decrease demand for their products or services. This can lead to cash flow problems and, ultimately, failure.

However, there are things that businesses can do to weather the storm. One of these is to diversify their products or services. This can help to insulate the business from a sudden decrease in demand for one particular product or service.

Other Economic Strife

The other issue we see that puts a strain on new businesses is the ongoing issues in Ukraine. The conflict there has led to a decrease in demand for Ukrainian products and an increase in the cost of materials. This has put a strain on businesses that export to Ukraine and those that import from there.

In addition, the devaluation of the Chinese currency has also had an impact on businesses around the world. The Chinese currency has devalued by around 20% against the US dollar since 2014. This has made Chinese products more expensive for businesses that import from China.

Increasing Cashflow in Business: The First Year

There are several things that you can do to increase your chances of surviving your first year in business.

As we mentioned earlier, one of the best things you can do is diversify your products or services. This will help to protect your business from sudden changes in demand.

It’s also important to build a strong team of employees. The right team will be dedicated and passionate about your business and its success.

Finally, you should always be looking for ways to improve your cash flow. One way to do this is to utilise public sector contracts. These contracts can provide a much-needed boost to your business during difficult times.

How Public Sector Contracts Can Help: Keeping Businesses Profitable

One way to avoid some of the common pitfalls mentioned above is to take advantage of public sector contracts. These can provide a much-needed influx of cash, which can help you to keep your business afloat during its first year.

Public sector contracts can also be a great way to get your foot in the door with larger businesses. These contracts can help you to build relationships with other businesses and to develop a reputation for quality and reliability.

Getting Your Foot In the Door: Running a Business

If you’re looking to get your foot in the door with public sector contracts, there are a few things you need to do.

In the UK, depending on the field within the public sector, there may be different rules and regulations that you need to follow.

It’s important that you research the public sector organisation that you’re interested in working with. This will help you to understand their specific requirements.

Once you’ve done your research, the next step is to put together a bid. This is where you’ll outline your products or services and how they can benefit the public sector organisation.

If you’re successful, the next step is to sign the contract and start delivering your products or services.

Public Sector Contracts: How We Can Help

Public sector contracts can be a great way to keep your business afloat during its first year.

If you’re looking for help with public sector contracts, we can provide the assistance you need. We can help you to register your business, obtain a D&B number, and apply for contracts. 

Set up a free account today!