Small Business Survival Rates
Starting a small business is just the beginning of a long-term process. The moment you decide that you want to start a business; you are taking on a lot of responsibilities and duties. Statistics have shown that almost 90 percent of all new businesses fail within the first two years. Lack of proper funding and under-developed business plan are the major culprits of the high failure rate. Poor management and advertising skills are also a large part of business failures. Given the high failure rate, business owners should consider learning how to get started on the right track and avoid early failure at all costs. Below are some tips to help you survive during your first two or three years to take your business to the next level.
A Good Business Plan
One of the most common causes of failed business is the lack of a proper business plan. Most business owners thought that writing a simple business plan is enough. However, the fact is that a properly developed business plan makes a big difference between success and failure. The business plan needs to be carefully developed in such a way that every step is carefully explained in a dedicated timeline. These steps give you something to strive for as small benchmarks to achieve.
You should invest enough time for your business plan. Once you have got the plan, you should act upon it and constantly review it to make sure it is up to date and effective. If the business environment changes, you need to change your business plan to adapt to the new environment. It is important to remember not to act too quickly in advance when moving forward. It can cause you to miss a step that can cause a financial setback.
Strict Control Over Your Finances
During the first few years, your business may not generate any profits at all. It is possible to turn a profit very quickly if the process taken to start the business is done smartly. A financial plan along with having enough funding to support the business for at least 24 months. Proper funding from the start gives you more of a cushion to develop the business, as it should be, which is step-by-step. You have to make sure you have a good financial plan and enough funds to get through the tough times. Expect a few missteps along the way, it is to be expected. An emergency fund is also something important that every business should have. These funds are set aside specifically to handle setbacks and those minor mistakes. Cutting down on overhead and frivolous costs leaves enough set aside for unexpected emergencies, mistakes and slow periods.
Being a business owner means that you have got to have a lot of discipline. Since no one will supervise you, you need to be a self-starter. Mental strength is an asset that many business owners lack. Making decisions that are not clearly thought out can be detrimental to the business. Every decision that you make affects the business both directly and indirectly. If you are unable to see where an expense will take you, refrain from making that expense. Some business owners think that because they own a business, they have more money. That is definitely not the case in all endeavors. In order to spend money, you have to be earning money. Starting with enough capital and following your strictly laid out business and financial plans will help you to achieve optimal success.
The tips shared above are in place just as reminders to help a new business owner understand what it takes to be successful. Discipline is just a small part of being successful as a business person. Gaining people skills while learning how to grow your business in a healthy way are important implementations. Getting some guidance from Provident Dedicated Services, LLC can be more than beneficial to you in the start-up stages.