Why the right foundation can increase the probability of your survival.
If you’ve decided you want to start a business, it’s critical you understand the statistics on new business survival. Understanding only 5% of businesses started just three (3) years earlier, will have closed, should not stop you. Understanding the survival rate for Internet businesses may even be worse, should only lead to investing as much research as is necessary to increase your chances of survival and profitability.
Most businesses fail because the business owner failed to invest the time necessary to ensure he had the right product to sell, had chosen a market hungry buy it, and a had developed a means to communicate effectively with them.
These issues must be addressed by anyone looking to succeed in business. They’re critical parts of developing a foundation for your business, giving it a chance of beating the odds. Starting a business now is easier than it has ever been if you have the right strategy. Looking to get rich quick, should not be a part of your strategy. If you don’t plan to offer your customers value, maybe going into business isn’t for you. A good rule of thumb would be to use the 1/3/5 rule when planning to start a business. It typically takes one (1) year for customers to even know you exist. It typically takes three (3) years to earn more than you could make working a job. And it usually takes five years to have the confidence to consider expansion, or the possibility of earning big money. If you aren’t prepared to deal with those realities it may be best if you look for ways to advance in your career.
Develop a realistic plan before investing money or time
A first and critical element of starting any business is to have a plan. You must plan how you’ll make money. A material part of that is determining who your potential customers will be, and how your offering will address a need they have. You have to determine if you’ll have enough money in reserve to execute the plan you develop. We all have dreams, but starting a business without a plan, can become a nightmare. Then you must have a plan to communicate with your target market. It doesn’t matter what you’re selling if no one knows you have it. A terrible philosophy many failed business owners have undertaken is to write a one or two page business plan then spending the time you would have spent writing a comprehensive plan to learn as you go. It may have worked in some obscure situations, but I have never heard of it working at all.
Developing a detailed business plan requires you research the market you plan to serve. It helps you develop possible contingencies you may have to employ when a section of your plan isn’t functioning as you’d hoped. In many ways it’s like the paper trading investors do before trying it with their money. Properly prepared, business plans help you determine if you’ve met benchmarks you set for your excursion into the jungle called owning a business. Business plans alone can increase the probability of your survival by four (4) to five (5) times.
Not until you’ve invested the time and research into developing a personalized business plan should you consider spending money to develop a foundation for your planned company
Even with a business plan, some business owners make a mistake of investing all their available resources in buying inventory for resale or buying the literature, Internet access and other tools necessary to sell services to customers or clients. Using that approach may not prepare you to even cover your costs. Only a few people will know you exist and you may spend years trying to brand your company and get it known.
Many people think a material part of that implementation should be a website. Unfortunately they’re only half right. It goes without saying a sticky website that keeps visitors engaged in the technological world we live in is a must. But, you must have a means of getting visitors to your website to realize the value it can provide. Most developers charge hundreds if not thousands for a website, which does little by itself. You need a domain, and hosting, e-mail marketing, a presence on social networks, a means to analyze visitor behavior at your website and to analyze website health. you can get those things from Saafenet for a few hundred dollars and the resultant increase in sales can make it seem like it was free.
Professional help is another cost few new business people factor into their calculation of cost to open a business. Even with days or weeks of rigorous research, some important steps may be overlooked. Plans on dealing with an unexpected contingency may not have been made. Or, conclusions developed may have been insufficient to deal with it. Due to some commonalities in all businesses, advice may be sought from the volunteers of Score. However these executives typically were employed by large companies. They may never had to deal with issues as simple as how to get their first clients. Small business expertise is what’s needed. The advice available through Saafenet is more targeted to small business. And, may address issues an executive from a huge corporation may never have had to address. He may offer theory, but you need the advice of someone with actual experience. The customer service engineers at Saafenet have that kind of exposure and can keep you from making mistakes that destroy small businesses every day. Their advice could easily make the difference between success and failure for a small business.
Having hopefully reinforced the need for planning read the next post to see the minimum paperwork necessary before you can even apply to have your business licensed.