Pitfalls In Starting A Business
Alan Lewis
Accountants

 Unreal aspirations
 Over committed – lack of
management knowledge
 No professional advice
 High probability of
failure
 There are winners – but
always many losers
 Hard work and long
hours
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 Adequate advice
 Recognition of management
deficiencies
 Business Plan:
adequately manage the business
earn a reasonable salary
earn a reasonable rate of return
ultimately be able to retire with dignity
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 First requirements
are:
adequate capital
reserves
pre-planning
professional advice
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Lack of:
 Management skills
 Bookkeeping knowledge
 Accounting knowledge
 Capital
 Cashflow management
 Business Plans
 Marketing knowledge
 Empathy with customers
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 Management skills
 Regular financial reports
 Monitoring of stock, work in progress
and debtors
 Staff – supervision, training and
leadership
 Understanding bookkeeping
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 Know something about
the business
 Aptitude to succeed
 Knowledge of type of
business
 Detailed Systems’ Manual
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 Requires careful
planning
 Get advice before
signing a contract
 From people who
understand small
business
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 Hours
 Capital
 Need for external
advice
 Adequate systems
 Advice throughout
the year
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 Have sufficient capital
 Treat “Goodwill” with suspicion
 Invest in a business in which you
have some knowledge
 Check and cross check figures
 Be realistic
 Control overheads costs, stock and
wages
 Off season trading – do you have a
plan?
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 What is going on around the business?
 Establish the market potential
 What special skills do you you require?
 Competent accounting and legal advice
 Will the business suit everyone’s lifestyle?
 Discuss the working hours
 Remember – accounting firms are there to
assist you
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