There were 30.7 million small businesses in the US in 2019, and around 627000 new companies, most of them small or micro, start every year. Unfortunately, about 595000 businesses close down each year, and an estimated 20% of small businesses fail in their first year, and 50% in the first five. More small businesses are starting than ever before. Changes in technology and how we utilize the internet in day to day life has revolutionized business, and the opportunities for people with great ideas are far greater than they once were. If you’ve got an idea or you spot a gap in the market, there’s usually no reason why you can’t have a go at starting your own business.
But, a large amount of them fail. Even those that start out strong often struggle to sustain growth, or even make a profit. The competition proves too great, they can’t keep up with bigger business, and newer companies with better technology, newer ideas or lower prices overtake them. It’s a great time to start a business, but that also means that there is a lot more competition in most industries.
Learning as you go is crucial for both new and old business owners. You can never rest; you always need to be looking for new information and making an effort to keep your knowledge up to date. But, learning from other people and their mistakes is a great way to give yourself a head start. Here are some of the secrets behind startup success.
Cash Flow
There are many businesses that you can start without cash. But, there are many more where you need some startup capital, and even those that don’t require cash can undoubtedly benefit from it.
Whether you want enough money saved personally, so that you aren’t taking as many personal financial risks when you start your business or enough money in the business to give yourself options or a safety net for the first few months, it’s helpful.
Get to know more about your financing options before you get started. Look into a business loan for construction, investors, other lending and borrowing, or investing your own money. Don’t wait until you are desperate for cash before understanding where you might get in from.
A Good Business Plan
A good business plan isn’t just something that you need to secure a loan. It’s much more than that. A good business plan gives you a purpose. It keeps you on track, gives you goals and reminds you of what you want from your business. It’s something that you can look at when you need focus.
But, that doesn’t mean that the business plan that you wrote when you started out is gospel. To be effective, it should evolve to meet the changing needs of your business.
A Reliable Support Network
One thing that many successful small business owners have in common is a strong and reliable support network. They have friends and family that understand that starting a business is a big commitment and that they might not be around as much as usual. They have people that understand the stresses of starting a business and are there when they need a boost or someone to vent at. They also have mentors and people that they look up to who can offer advice and guidance. The bigger your support network, the easier life will be.
The Right Team
You may start your business on your own. Working by yourself doing as much as you can without help, and outsourcing when you need to. But, at some point, if things go well, you will be ready to hire staff.
A common mistake that many small business owners make is hiring people that they know or the first people that are interested in the job. They fail to realize that their employees become a significant part of their business. Hiring the wrong people is a waste of time and money. It can mean that customer service slides, that your products or services aren’t as good as they should be and that morale is low. Take the time to find the right staff, treat them well and offer them as much flexibility as you can, and your business will have a much better chance of success.
Solve a Problem
The most successful businesses are the ones that solve a problem or fill a gap in the market. They certainly aren’t the ones that try to do the same as hundreds of other companies.
Ask yourself how your business is different. If the products or services that you are offering are already available, what makes you different? Why would people use your business? What can you do to make it stand out?
Become an Expert
One thing that might give your business the edge is your expertise. Becoming an expert in your field, employ knowledgeable people, and your customers will keep coming back. Your business will become the authority in the area.
Know the Risks
Knowing the risks can help you to avoid them or to take steps to reduce them. Take your time to learn more about why small businesses fail. Speak to people that have been in your situation, learn from their mistakes and take their advice. Learn as much as you can, and never stop seeking new knowledge.
Preparation
Don’t rush in. Starting a business is exciting, and it’s tempting to rush straight in. You want to start making money and get stuck into the fun stuff. You don’t want to spend time organizing and planning. But, this can be what makes your business work. Take your time with your business plan, look at financial forecasts, spend time on recruitment, as well as searching for the right supplies, materials and equipment.
Realistic Expectations
Having unrealistic expectations can mean that you make poor decisions. Trying to be too bold can mean that you take too many risks and make too many mistakes. Trying to grow too soon can mean that you cut corners and that everything crumbles. Instead, set realistic expectations and smaller goals. It’s better that it takes you time to grow, than that you rush and fail.
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