Kavan Choksi Business Advice: Survive that First Year

Kavan Choksi on Making it Past the First Year of Business

According to business consultant Kavan Choksi, not all businesses are meant for success. It is a harsh reality many entrepreneurs face early on. A lot of businesses go under within a year. The companies that survive their first year eventually fold before their fifth year.

Businesses close for many reasons. It can be due to bad business decisions, competition, or market movement. One day everyone's buying your product; the next, they're tired of it.

While there's very little one can do to influence the market, Kavan Choksi says that ensuring your business decisions are sound can help your company thrive. To help you know what to avoid, Kavan Choksi shares some important tips for business owners in their first year.

First, never start a business while you're in debt. Starting a business without your debt cleared is a mistake. Not only is it challenging, but it is also dangerous -- especially if you still have debts like student loans. In addition, personal debt has ways of clawing its way out of your finances and into your business finances.

Next, try to avoid getting funding from banks and creditors. It may seem like the easiest way to finance your business. However, it has a very harsh backlash that hits business owners eventually. According to Kavan Choksi, businesses are rarely profitable at the start. Entrepreneurs could face stacking credit bills early on while dealing with payments to sustain the business.

Lastly, make sure you keep your books up to date. Businesses aren't as transparent as simply paying rent, employee salary, and utilities and paying off these with what you get from sales. Always remember that money can bleed from different places in your business. It could come from unnecessary purchases, overstaffing, delinquent clients, or expensive suppliers. If you can't track your expenses properly, Kavan Choksi says your boat will eventually sink.

For insights on business, economics, and finance, follow this page for freelance business management consultant Kavan Choksi.