How do you make sure that you are not one of the 50% of US businesses that fail in the first five years of trading? What do you need to do to ensure that your business goes from strength to strength and beat off the competitors? It is all to do with preparation, and here, we look at three things that you can do to ensure that you are ready to succeed in business from the very start.
Do Your Homework
Before you do anything, you need to make sure you have a solid business plan. The chances of you getting any loans or help from your banks are slim without a watertight plan. It takes time and patience and plenty of market research. Check out the local market and your competitors to ensure that the market is not oversaturated and that there is a gap there for you to fill. Knowing your competition and the demand for your product is so important to help you get an idea of how successful your business can be. You may find that you need to tweak your ideas a little bit so you can slip into a gap in the market that was waiting for you.
Location, Location, Location
Having business premises in a prime location will help to boost your visibility. It doesn’t matter whether you are looking for retail space or offices, location is everything. If you don’t hit the mark when it comes to choosing your business premises, you can really damage your chances of making your startup be the best it can be.
Financing
In most cases, you will need to invest a lot of capital when you are looking to start a new business from the ground up. We are talking about anything up to six figures for bigger startups. If you are looking to loan finance for your business, make sure you do your research and choose the appropriate loan for your needs. One thing you do not want to do is start off with limited funds and then struggle to keep the company afloat if you are not bringing in enough money – once you get caught in that cycle, it is extremely difficult to obtain credit to keep you going.
As an estimate, it is advised to have enough funds to cover for a minimum of six months, but more ideally up to a year. This will give you the very best chance of making your new venture a success without worrying about how much you are making and not being able to meet all your expenditure.
A detailed business plan that is realistic and thorough will give you a more accurate idea of the kind of expenses that you can expect. Being able to meet these for the first six months at least will provide you with more time to focus on doing what you are doing without having the added pressure of needing to make money from day one just to keep you going.
You also need to be realistic about what you can expect to achieve in your first twelve months. Goals are a great thing to help you build on what you have but concentrate on building a solid foundation first. You would not build a house on sand, so do not try to expand before you are established enough to branch out. Once you have built your foundations, then add new products, services, and possibly locations. Put simply, do not try to run before you can walk.
Once you have the basics in place, you can then look at ways of diversifying your business with the same care and attention you put into your initial startup.
In a nutshell, it pays to take the time and care before you put your ideas into action if you want to give your business the best chance it can to succeed. Careful planning and research of not only similar business ideas and locations but also of the realistic finances you will need to help you concentrate on what you do best and not on how much money you are making.
Impatience leads to mistakes and crucial errors being missed. So, if you don’t want your business to be one of the 50% who doesn’t make it past the first five years, it makes sense to put just as much effort into the planning stage as when you are up and running.
