Starting a business is complicated. You’re taking on extreme financial risk, and most likely signing yourself up to work harder than you ever have for at least the first year. Theoretically, that risk will pay off when you’re the owner of your own successful business.
However, that’s not always the case. About 20% of businesses fail in the first year, according to the Bureau of Labor Statistics. This is usually due to a lack of capital or funding, an inadequate management team, bad marketing, or a faulty business model. That’s a scary possibility to consider when you’ve put so much time, effort, and money into starting a business.
According to the Small Business Administration, their average starting loan size for a company is about $350,000. If you owe anywhere near that, you definitely can’t afford for your business not to work out. Even if you only spend the average amount for a micro-business, which is between $2,000 and $5,000, you still have quite an investment.
So, how can you protect that investment and ensure that your small business is set up for success? There’s no 100% guaranteed method, but there are things you can do to protect yourself. Let’s jump in and discuss a few quick steps you can take to foster success when opening your new business.
Know Your Niche: Consider Your Unique Needs
Every business has unique needs. Construction companies, for example, need tools, safety equipment, and vehicles to transport their other equipment in. If you’re starting that kind of business, you can begin by renting flatbed trucks for you and your crew to use.
That way, you have time to see how business is going to go before you spend the money to invest in large pieces of equipment. Regardless of what kind of business you’re starting, you need to make a list of your specific needs to ensure that you’re fully prepared for the realities of doing business.
It’s a good idea to do some research about what the common needs are in your industry. You can look into what other companies have, find resources online, or even look for a mentor to help you prepare to take your first steps in the industry.
Don’t forget to consider the needs of each individual section of your business. What do you need to function financially, technically, and productively? When you answer these questions, you’ll be well on your way to achieving your goals.
Transform With Tech: Use Technology To Make Business Easy
Every business can be made easier using technology. From email marketing and GPS tracking to ensuring your information is received in an instant and using the cloud to have easy access to company data, the world of technology has a lot to offer.
What it can do for you will depend on what business you’re in, but here are a few ideas to get you started. You can use technology to
- Connect with other professionals in your industry.
- Improve the way you reach new customers.
- Use social media to build a bigger and better brand.
- Work remotely, which has become extra important lately.
- Make your work more productive and secure.
- Provide better and faster customer service.
- Automate tasks to save time for you and your customers.
- Make and produce videos to promote your business.
As you get your business up and running, look for ways that technology can be used to improve your processes and speed up your tasks. The more efficient you are, the more opportunity you have to make a profit.
Figure Out Your Financials: Create And Maintain A Budget
Lack of cash flow is one of the main reasons businesses fail. When you don’t have a clear understanding of your financial status, it’s hard to keep yourself from going overboard and spending all of your profit. You can prevent that, by creating and maintaining a budget.
The first step to creating a budget is to examine how much money you have available to you. This can include money from the business, your savings, or a start-up loan.
Once you know what you have, you can move on to step two, planning how to spend it. Take a hard look at what you actually need for your business to be successful, and what you can wait on. If you’re able to put off more expensive purchases until later, take the opportunity to do so.
While you’re planning how to spend it, account for your recurring costs first. Utilities, building costs, rental fees, the salaries of your employees, taxes, and insurance all count toward these recurring costs. After you know what they are, subtract that number from your total budget to see what you have leftover for other areas.
The last step is maintenance. You can’t just set your budget once and then leave it for long stretches of time. You need to look over it regularly to ensure that you’re staying on track and in line with your financial goals.
Give Yourself Goals: Set Realistic Benchmarks For Success
The last step you need to take to prepare for lasting success is to set realistic goals for your business. Much like how checking in on your budget is important to ensure you’re on track financially, checking in on your goals is important to ensure you’re staying on track in other areas of the business.
You can set goals for your performance, sales, growth rate, customer satisfaction, and anything else you can think of. Choose what’s uniquely important to you and your business and go from there. Don’t forget to modify these goals as you go along to ensure they’re staying up to date and reflective of where you are in your journey.
If you’re at a loss for what your goals should be, take a look around at what others in your business are up to. Find a company you admire and research what they did when they first started out. It never hurts to take ideas for goals from your list of inspirations.
As you hit each goal, celebrate the accomplishment and add another so you can continue to focus on growth.
When you take these steps at the beginning of starting your business you set yourself up for a successful venture.