--- title: How to enhance the chances of your new business’s survival? description: For all the rewards of being your own boss, many things taken for granted but you can still enhance the chances of your new business to survive. image: https://trekkadvisory.com.au/hubfs/Blog%20Images/female-entrepreneur-chances-business-survival.jpg --- [!["Trekk Advisory" logo: bold black "Trekk" in modern font with smaller red "ADVISORY" below on a white background.](https://trekkadvisory.com.au/hs-fs/hubfs/Logos/trekk-advisory-logo-black%201.png?width=150&height=75&name=trekk-advisory-logo-black%201.png "\"Trekk Advisory\" logo: bold black \"Trekk\" in modern font with smaller red \"ADVISORY\" below on a white background.")](https://trekkadvisory.com.au) - [Featured services](https://trekkadvisory.com.au/how-we-help) - [Business accounting](https://trekkadvisory.com.au/small-business-accountants) - [Clarity Bookkeeping](https://trekkadvisory.com.au/clarity-bookkeeping) - [Xero cloud accounting](https://trekkadvisory.com.au/xero-cloud-accounting) - [Advice + business advisory](https://trekkadvisory.com.au/business-advisory-services) - [Tax minimisation + planning](https://trekkadvisory.com.au/tax-minimisation-and-planning) - [Self-managed super funds](https://trekkadvisory.com.au/self-managed-super-funds) - [Business Valuations](https://trekkadvisory.com.au/business-valuations) - [How we help](https://trekkadvisory.com.au/how-we-help) - [Understand your numbers](https://trekkadvisory.com.au/how-we-help/understanding) - [Grow your numbers](https://trekkadvisory.com.au/how-we-help/growth) - [Leverage your numbers](https://trekkadvisory.com.au/how-we-help/leverage) - [Who we are](https://trekkadvisory.com.au/our-team) - [Resources](https://trekkadvisory.com.au/information-centre) - [Get in touch](https://trekkadvisory.com.au/contact) - QLD - [Brisbane](https://trekkadvisory.com.au/brisbane) - [Gympie](https://trekkadvisory.com.au/gympie) - [North Queensland](https://trekkadvisory.com.au/north-queensland) - [Rockhampton](https://trekkadvisory.com.au/rockhampton) - NSW - [Northern Rivers](https://trekkadvisory.com.au/northern-rivers) [Download: Success Checklist](https://trekkadvisory.com.au/business-success-checklist) ![A young female entrepreneur carrying a box of chances for her new business's survival.](https://trekkadvisory.com.au/hubfs/Blog%20Images/female-entrepreneur-chances-business-survival.jpg) September 02, 2019 By Eryan Haddon # How to enhance the chances of your new business’s survival? ##### Share: - - - For all the rewards of being your own boss, many things taken for granted as an employee will disappear: job security, set hours of work, known and guaranteed income, holiday and sick pay, and long service leave. Our advice to anyone seeking to establish a small business covers five “must-have” personal qualities and resources. 1. A commitment to hard work and personal sacrifice; 2. Enthusiasm, tenacity, and self-confidence; 3. A product, skill, or service which is marketable; 4. Managerial, administration and marketing skills; and 5. Adequate personal financial resources. According to the Australian Bureau of Statistics, more than 60% of small businesses cease operating within the first 3 years of starting. This is a fairly daunting figure to look at when you are a really enthusiastic business person looking at starting a new venture.  While the reasons for business failure are many, the most common appear to be: - Under capitalised; - Poor management; - Inadequate records; - Stock – too much, or too little; - Failure to plan; - Misuse of time; - Neglecting marketing; and - General management incompetence. Yet excuses for business failure are too often levelled at “business climate”, finance costs and difficulties, demand slumps, and regulations – not at the five “must-haves”. ## **Insufficient capital** Insufficient capital makes it difficult to purchase stock and materials which in turn means lost sales. Invariably the business will fail to meet its commitments as they fall due. ## **Lack of management expertise** A detailed business forecast/plan is essential, not only for the purpose of raising capital but to act as a blueprint for your business’s future growth. Make sure you have the necessary expertise in your chosen business field; don’t think you can get away with learning on the job. ## **Cash flow** Any business that fails to forecast its cash flow appropriately is headed for trouble. Without proper and accurate cash flow projections, management is unable to identify future cash requirements and hence lacks vital information about the financial direction of the business. That’s why we strongly recommend the preparation of a 12-month cash flow budget *before* you start the business. Ideally, each business should have a budget showing expected future income and expense levels and the minimum return to the owner. There are many “tricks of the trade” that can be used to preserve your cash flow – leasing particular assets as opposed to buying them is a good example. It is vital for each business manager to know the point at which the business will break-even. This is the point at which the gross profit (revenue less direct costs) equals total fixed costs. Knowing these revenue levels and monitoring them regularly will equip the owner to know from month to month how his or her business is performing. There are many signs on the road to failure and if these are addressed then survival is more likely to be assured. ## **7 Profit vs cash flow** It is often not fully appreciated by business people that making a profit does not necessarily mean cash flow will be positive. *A wise man once said, “Profit is an opinion, but cash flow is a fact.”* The long term trend of both must be positive. Hence it is vital to appreciate the importance of the interaction between profitability and cash flow projections. Low-profit months will generally impact on cash flow in the current and following periods. Therefore the ups and downs in turnover will usually be mirrored in cash flow projections. The following is a list of items that often contribute to there being differences between profit and cash flow. - Debtors; - Work in progress; - Stock; - Fixed assets; - Shortened supplier terms of credit; - Change in sales mix, with an increasing proportion of credit sales as opposed to cash sales; - Loan repayments; - Taxation; - Dividends; and - Depreciation The cash flow budget and the other scenarios we will prepare on your behalf will take these factors into account. However, please do not hesitate to ask us if you require further clarification in this important area. ## **High gearing** Borrowing excessively means a greater portion of gross profit is directed towards finance costs. Cash flow is also drained by repayments. ## **Incorrect pricing policies** Too often prices are set to market determinants rather than to cost recovery and profitability generation. Efficient service or added value may be more important than price alone. Unless you can make an adequate margin of profit, you are doomed to failure. ## **Marketing** Many small businesses go broke simply because they don’t sell enough products or they fail to keep abreast of the market, operating and technological changes. In business, nothing is constant. There are many definitions of marketing, however, put broadly, marketing is a strategic mix of business activities that work towards a bigger goal of building your brand and business. Marketing is about identifying and understanding your customers and developing products and services that meet their needs. You must continually update your product or service to stay in tune with market demands. ## **Partnership problems** Partners should be selected in the same way as employees are selected – that is, on the basis of their ability to contribute effectively to the business and help achieve its goals. Too often a partner is selected simply because he/she is a relative or friend or is willing to contribute an amount of capital.  Regardless of the “business climate”, most managed businesses will be able to: - Weather economic and business storms; - Have proper financial information; - Have an adequate product mix; - Do not rely too heavily on one, or a limited group of customers or clients; and - Know their operating environment. Ensuring you have the above in-check will most certainly enhance your chances of business survival, no matter what the climate. If you ever need any help on your business journey, no matter the stage or what issues you are experiencing, the Trekk Team can help, [get in contact](https://trekkadvisory.com.au/contact) with us today for a free, no-obligation chat about your business.        [Created with Sketch.](https://www.facebook.com/sharer.php?u=https://trekkadvisory.life/journal/enhance-success-new-business) [Created with Sketch.](https://twitter.com/intent/tweet?url=https://trekkadvisory.life/journal/enhance-success-new-business&hashtags=) [Created with Sketch.](https://www.linkedin.com/shareArticle?mini=true&url=https://trekkadvisory.life/journal/enhance-success-new-business&title=how-to-enhance-the-chances-of-your-new-business’s-survival) #### About Author [Eryan Haddon](https://trekkadvisory.com.au/information-centre/author/eryan-haddon) Eryan is an Director of Trekk Advisory and operates from our Townsville and Mount Isa offices. She's been in Public Practice for over 20 years because she loves working with business owners to achieve their version of success - whether its more profit, more cash, more time - It's all about being a part of a team and being able to share those 'F\*ck yeah!' moments with her clients when we get results that make a difference. Outside of work, you will probably find her getting ready for a game at the netball courts or touch-field (OR in the car driving her two daughters from one sport to the next). Being active and sharing this with her daughters is something special, and she wouldn't have it any other way. Eryan is all about motivating her team, clients and herself - it's about being strong, confident and humble - so she'll often share little nuggets of wisdom. One of her fave pieces of advice is "Stand up for the things that matter, don't settle, don't apologise for who you are . . . Be f\*cking brave" - Lisa Messenger and she loves a motivational podcast to get her going; Oprah's Super Soul, Crappy to Happy! #### Related Posts [![Trekk Advisory business accountants team in Rockhampton office](https://trekkadvisory.com.au/hubfs/trekk-rockhampton-business-accountants%20(1).png)](https://trekkadvisory.com.au/information-centre/effective-cash-flow-solutions-for-businesses) February 12, 2025 #### [Effective Cash Flow Solutions for...](https://trekkadvisory.com.au/information-centre/effective-cash-flow-solutions-for-businesses) Running a business is a bit like juggling flaming torches. Thrilling? Absolutely. But drop one, and... 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[Read More](https://trekkadvisory.com.au/information-centre/accountants-and-financial-advisors-whats-the-difference) ## Subscribe our newsletter to get latest news & updates Lorem ipsum dolor sit amet consectetur adipiscing elit [![trekkadvisory.com.auhs-fshubfsLogostrekk-advisory-logo-white](https://trekkadvisory.com.au/hs-fs/hubfs/social-suggested-images/trekkadvisory.com.auhs-fshubfsLogostrekk-advisory-logo-white.png?width=200&height=100&name=trekkadvisory.com.auhs-fshubfsLogostrekk-advisory-logo-white.png "trekkadvisory.com.auhs-fshubfsLogostrekk-advisory-logo-white")](https://trekkadvisory.com.au) Trekk Advisory exists to harness the power of numbers, nouse and know-how to boost your business, and guide you to your great. ###### Three stages that are key to your business: - [01 Understand your numbers](https://trekkadvisory.com.au/how-we-help/understanding) - [02 Grow your numbers](https://trekkadvisory.com.au/how-we-help/growth) - [03 Leverage your numbers](https://trekkadvisory.com.au/how-we-help/leverage) ###### Featured services - [Business accounting](https://trekkadvisory.com.au/small-business-accountants) - [Xero cloud accounting](https://trekkadvisory.com.au/xero-cloud-accounting) - [Advice + advisory](https://trekkadvisory.com.au/business-advisory-services) - [Tax minimisation + planning](https://trekkadvisory.com.au/tax-minimisation-and-planning) - [Self-managed super funds](https://trekkadvisory.com.au/self-managed-super-funds) - [Business Valuations](https://trekkadvisory.com.au/business-valuations) - [Full list of services](https://trekkadvisory.com.au/how-we-help) ###### Contact Us - [Brisbane QLD](https://trekkadvisory.com.au/brisbane) - [(07) 3378 7733](tel:+61733787733) - [Gympie QLD](https://trekkadvisory.com.au/gympie) - [(07) 5482 7655](tel:+61754827655) - [North Queensland](https://trekkadvisory.com.au/north-queensland) - [(07) 4773 7555](tel:+61747737555) - [Northern Rivers NSW](https://trekkadvisory.com.au/northern-rivers) - [(02) 5601 9900](tel:+61256019900) - [Rockhampton QLD](https://trekkadvisory.com.au/rockhampton) - [(07) 4922 2280](tel:+61749222280) © Trekk Advisory 2026. 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