Small business survival
Now that you are thinking about starting your own business, have you considered your chances of survival? Before you get started, you should be aware of the statistics on small business survival and failure.
Odds of Success
When you start your own business, you may have to wear many "hats". You may have some great ideas, but how are you at handling business operations like administrative or managerial tasks? You need to know your strengths and weaknesses. Lack of management experience can lead to small business failure. Do not be shy about seeking out the advice of experts, networking with other entrepreneurs and hiring employees to help you run the business.
Passion, persistence, and innovative thinking can improve your odds of success. Do you know what you want to achieve? Having determination, setting goals, paying attention to detail and motivating others are all key elements to achieving success and business growth.
On the other hand, desire and persistence alone will not make you successful. For example, a lot of people love to cook and are talented chefs. Some may even dream of starting a restaurant. However, there are many restaurants in the marketplace; the profit margins are slim and customers have lots of choice. To be successful in that market, you need to truly be offering something new or unique. In short, you need to be sure that there is a big enough market for what you plan to offer and that the competition isn't already too strong.
Follow these tips to avoid some of the pitfalls that can lead to small business failure.
- Develop a good marketing and business plan that takes into account customer needs, competition, pricing and promotional strategies.
- Have a good working knowledge of business law or hire a lawyer.
- Understand your business finances, such as cash flow and handling credit.
- Keep a good inventory of your products or services and your existing customers.
- Supervise, train and motivate your employees.
- Make sure you have the experience, expertise and talent to run your business.
- Plan every part of your business from start to finish.
- Know your market and define how much of it you will be able to capture.
- Make sure you are offering a product that is unique and competitive or at a lower cost than that of your competitors.
- Don't under-estimate your expenses and over-estimate your revenue.
- Make sure you have some cash reserves or a line of credit to help you get through slow periods.
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