Ask the Expert” Q&A with Ann Hawkins 

This is a compilation of the live Q&A

Q. What do you think is the main reason that new businesses fail?

Ann Hawkins Government statistics show that 50% of new businesses fail within 12 months, with 90% no longer trading after five years. 10% close involuntarily due to insolvency and 90% cease trading because the business is not providing a satisfactory income for the owners, so lack of profit is the overwhelming reason for failure.

The question I get asked most by business owners is how to manage their time so that they’re not working 24/7 – this is usually related to not making enough profit to pay for help. Too many business owners are barely scraping by, despite working really hard, and it’s often just because no-body has shown them them how to run a business profitably.

Don’t run out of money!

Ann Hawkins The simplest way to deal with  the risk is to have another income stream while you build up your main business. Running out of money is the biggest threat to any business and keeping a check on cash flow is the most important activity for a business owner. Is there something you can create once and sell many times, e.g. an ebook or course? Preferably this would be an easy entry into your higher priced services too.

Andy Boothman What do you need to think about when going into business with someone?

Ann Hawkins All the obvious things about trust, being really clear about expectations, writing EVERYTHING down, getting a proper agreement but also looking at some unexpected things.  A lot of things are covered in this post (and talk to me if you need help!): “Starting a business with friends? You need this!”

Planning is vital

Q. I take it you don’t do new year’s resolutions, but can I ask, how far in advance do you plan your goals for each year and what sort of strategies do you use for goal planning?

Ann Hawkins I think it’s important to have a life plan – when do you plan to retire, how much money will you need as a pension, what will you do when you retire – then plan back from there. The shorter term goals should all lead towards the big one and help you to make decisions. Of course stuff happens that we don’t plan for but not having a plan means just taking each day as it comes!

Q.  Yes, makes sense. In other words, a plan of some sort is better than no plan at all?

Ann Hawkins Yes, then all the smaller goals, like staying fit, eating well, learning new skills have a real purpose. The biggest benefit tho, is that it makes it easier to make decisions on a day to day basis.

Q. I guess it’s a bit like having a map – you figure out where you want to go then you can look at route options and if you come across a road closure then you divert and find an alternative route.

Ann Hawkins There’s a great phrase “The map is not the territory” that explains that although we know where we want to get to, we don’t know how difficult or easy the terrain will be until we set out, but as long as you know where you want to end up, and you want it enough, you’ll find a way to get there.

Marketing and social media

Q. Is a Facebook fan page really needed for leads opportunities for new business? Sometimes I feel like quitting all the social media but then I ask myself how it will affect my business in the social media and technology age.

Ann Hawkins That’s a really BIG question. Short answer, don’t quit. On-line presence is really important but a Facebook Page is notoriously difficult for a small business and its much better to have your own mailing list.

Before anyone dives into using social media I’d advise you step back and think: How many clients do you need a month? How much is each one worth (revenue to your business). Do you get repeat business from old clients? If the number you need is low there may be better ways than social media to find them but you still need an on-line presence for validation. It’s always worth remembering that most things in business have already been done by somebody so it’s always worth looking at what the successful people in your sector do

The future of business

Q. What do you think the business world will look like in 10 years time?

Ann Hawkins  I get very excited about technology which is all about change but I’m equally fascinated at the enduring predictability of how human beings relate to each other. I think businesses of the future will continue to be heavily reliant on the internet and devices will talk to each more but humans will always need personal interaction, community, transparency and trust in each other.

Business owners need to understand how technology works without becoming a slave to it (turn your notifications OFF and CHOOSE when to respond to them!) but they also need to know how human beings work. However much technology can help us, we’ll always be selling to human beings and our ability to build trusted relationships will always and forever be the most important part of business as well as life.

Our biggest challenges in society will be to provide alternative purpose and meaning to people whose roles are taken over by artificial intelligence, to drastically reform education and to care for an ageing population – these are all business opportunities!

If you’ve got more questions for Ann on “How not to fail in business” ask in the comments section below, check out her blog Inspiring Entrepreneurs or follow her on Twitter @AnnHawkins for more great tips.