Starting out in business is not to be done lightly. When 20% of businesses don’t make it past their first birthday you need to prepare well. If you do, you may make it into the 30% of business that lasts more than 10 years.
Are you’re determined to run your own business? Before you complete your business starting checklist you need to know a little more about going into business. Read on for 9 things that might make all the difference between business success or abject failure.
1. Focus on Customers
If you haven’t thoroughly investigated the market for your product or service, do it sooner rather than later. A business that doesn’t understand its customers is destined to fail. No matter how enthusiastic you are about your business you need paying customers to turn it from a pipe dream into a profitable business.
Research the market you hope to serve. Who are your customers and how will you connect with them? For example, do they want to buy online or do they want personal contact?
2. Oaks Grow from Acorns
It’s wise not to overextend yourself in the early stages of your business start-up. What your business needs, to begin with, is to get some traction. Making too many demands on people, finances, and operations early on can put too much of a strain on a young business.
Starting small doesn’t mean you can’t end up big. After all, mighty oaks don’t start huge. They start small, establish some roots, and then reach for the sky.
3. Know Yourself
Starting a business takes a range of skills and knowledge. It’s important to be realistic about what your skills are. Recognize the gaps in your capability and think seriously about how to bridge that gap.
Should you delay the business launch until you have completed some education? Should you be bringing some expertise into the business to complement you? Perhaps you need a team approach rather than a solo effort.
4. Manage Debt
Many businesses need to use borrowed capital. This need not be a problem as long as you manage the debt effectively. Don’t take on more debt than your business can afford and guard against defaulting on any payments you must make.
If you fail to manage the debt you can lose your business. Even profitable businesses can fail if their cash flow isn’t well managed. Profit can’t be used to pay your debts if it’s not available as cash to pay your lender when the payments are due.
5. Seek Help
Getting help from those around you might make you feel inadequate but it shouldn’t. It’s fine to ask for help and you’ll probably need it. What you need before starting a business is some idea about where you can get help.
Research any business associations that can offer advice. Talk to friends and family before you start the business and find out if they are willing to help.
You might need help with child or elder care. Perhaps you need some technical help with your website. You could have a fabulous amateur photographer in the family who can help with product photography.
If you feel guilty about asking for or receiving advice make a promise to yourself. When your business is up and running, make sure you offer and give some help to a new entrepreneur when they are starting out. Paying it forward is a great way to thank those that help you by helping others.
6. Manage Risk
Of course, it’s important to be positive when you start up your new business. Optimism and a positive attitude might get you through the difficulties ahead. It’s also important to be aware of the risks that you face.
Considering the risks of a new business is not a negative approach. Understanding the risks and managing them can help you be successful.
Identify the threats to your business and assess how likely it is that they will occur. In addition, assess which of the threats will have a serious impact on your business. You should put plans in place to mitigate the risks of threats that are highly likely and potentially highly damaging.
One of the actions you can take to mitigate some risks to your business is general liability coverage. Business insurance can cover you for third party injury, damage to property, medical payments, and legal defense costs. If you are not insured, these costs could seriously damage your business and even lead to you losing the business.
7. Plan for Success
You might be surprised to learn that many successful businesses didn’t start with a business plan. That doesn’t mean that you shouldn’t have one. It does mean that business strategy is more fluid than many business plans suggest.
Have a business plan but be prepared to craft your strategy as opportunities open up and unexpected obstacles block your way. That way, you’ll be planning for success rather than for its own sake.
8. Know the Numbers
Keeping track of how your business is doing. Work out which numbers are key to your business and watch them like a hawk.
If you have debt repayments to make each month, keep an eye on cash flow so you can make the payments. If your plan needs you to grow market share, keep an eye on customer numbers and sales. Never forget that any fool can sell their product or service at a loss so understand your business model and how you make a profit.
9. You Are Not Your Business
You have to take care of yourself as well as your business. Make sure you look after your physical and mental health. Make time for friends and family so that you retain a work-life balance.
If you look after yourself, you’ll be able to look after the business.
Your Business Starting Checklist
You’ve probably got a huge business starting checklist. Make sure these points are covered. You’ll be giving your business a good start in life.
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