Why Agility is the Key Watchword for Start-Ups in 2017

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If you're launching a start-up in the modern age, you're definitely not alone!

According to the statistics, a record high 650,000 new businesses were formed in 2016, beating the previous mark of 608,110 reported in 2015. While most of these were registered in London, there was a diverse range of start-ups launched nationwide last year across multiple industries.

Given that around 50% of start-ups fail to survive beyond their first year of trading, however, it's crucial that start-ups are agile and capable of adapting if they're to enjoy sustained success. Here's some ways in which your start-ups can achieve this:

1. Minimise your fixed costs

Every single element of your business will have a fixed cost base, from the equipment that you use to the individuals who work as your employees.

As a start-up, it's imperative that you minimise your fixed costs, particularly those that have a long-term impact on your finances. This instantly creates a sense of agility within the business, while maximising the amount of cash flow and working capital that you have at any given time.

Two key areas of focus should be recruitment and the place in which you base your business. In terms of the former, strive to maintain a small core of permanent staff members who lead the strategic development of your business, while hiring skilled freelancers to help deliver individual projects.

When it comes to commercial premises, it makes no sense to sign a rigid, long-term lease in the modern age. Instead, you should consider investing in impermanent structures such as pop-up stores (if your a retail brand) or securing a rolling lease, as this allows you to adapt to changes in your businesses circumstances quickly and effectively.

2. Reduce debt and boost your cash-flow

Historically, start-ups would seek out loans to launch themselves successfully and provide an initial burst of cash flow. While there is nothing fundamentally wrong with this approach, it's increasingly important that entrepreneurs strive to find ways of minimising debt without compromising on the level of working capital.

Leveraging your accounts receivable is an excellent way to achieve this, as this helps firms to optimise cash flow without being restricted by 30, 60 and 90-day invoice terms. In short, start-ups can secure small, short-term loans by using their finalised invoices as collateral, before repaying this debt once their clients have made payment in full.

This creates transparency and flexibility within your business model, meaning that you can continue to deliver your products or services even when adhering to extended invoice terms. Business Loans from companies such as Market Invoice are genuinely beneficial to start-ups, while they also allow owners to maintain a larger equity share.

3. Embrace the principles of BYOD (Bring Your Own Device)

In the digital age, it's also questionable whether entrepreneurs need to invest heavily in the procurement of hardware. After all, modern computer and mobile operating systems are extremely advanced and adaptable, which in turn has allowed concepts such as BYOD (Bring Your Own Device) to thrive in the workplace.

This agile model allows your employees to use their own devices in the workplace, including the laptops and smartphones. As a result, you can create a lean start-up with lower launch costs, while you'll also transfer the burden of maintaining devices to individual users.

It can also be argued that this boosts productivity, as it tends to empower employees while encouraging them to complete perfunctory work tasks (such as checking emails) at home.

All you need to do is ensure that these devices are connected across a secure, wireless network, as this minimises risk and prevents your data from being compromised.

 

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