Launching a new business is exhilarating, but the challenging part is creating a business that lasts and ultimately turns a profit. Studies show that just about half of small businesses fail within the first five years, and this can be due fundamentally to insufficient planning, not really understanding the market, or financial mismanagement. The good news?! If you consider a few tips, you can avoid some of the failures before even getting started, and have a chance at an opportunity to make it a success.
Here are 10 tips to help you avoid business failure and help you succeed.
1. Have a Good Business Plan
Taking on business without a plan is like taking a ship out with a compass. You don't know where you are or where you are going. The business plan is there to help you articulate your goals, aspirations, what it will take to achieve them, your target market, and your planned financial projections. A thoughtfully structured business plan is not only good for you but a great tool to attract investors and partners.
2. Know Your Market and Customers
One of the worst sins we commit when starting a business is not knowing your market. Do your research. Research your competitors. Understand trends. Learn what your customers want and need. Very few business train in the long run if they truly don't understand or take the time to know their customers. these businesses... that are closer to customers. These businesses will also be the fastest to adapt and create a plan for what people will purchase innovation for, like trading in one 50 dollar bill for two 20 dollar bills.
3. Be Prudent with Your Cash Flow
Cash flow is critical for any business. Many businesses fail not due to a lack of sales, but due running out of cash to pay employees and vendors. Watching your income and expenses closely, developing realistic budgets for your income and expense budget, and always having an emergency fund ready for unexpected costs, are ways to be prudent with your cash flow.
4. Develop a Strong Cohesive Team
No one can be successful on their own. If you're going to hire employees, hire employees that have a good skill set that aligns with your vision and your values. Encourage teamwork, engage in developing and training your employees, and motivate them. A strong team can take your businesses forward, even when times are tough.
5. Put Customers First
Happy customers drive business success. Offer them great service, listen to your customers, and offer them the best customer service possible. A happy customer is a customer who comes back and is likely to recruit other customers to your business as well.
6. Develop Innovative Flexibility
At any time the market changes quickly. Businesses that still resist changes are generally left behind. Maintain your innovative thinking in response to new technologies, new business models or simply creative inspiration. Learning to be flexible allows your business to meet changes with success over time and quickly innovate and adapt.
7. Track Competitors
Competitor analysis is not about stealing their ideas, but being informed. Examine what works for your competitor and any area they might have neglected. If nothing else, this allows your business to offer something unique in terms of exposure.
8. Focus on Marketing and Branding
Even if your product is great, it won't matter if no one knows about it. Invest in thoughtful marketing, both online and offline. Develop a strong brand, so your product resonates emotional when consumers think of your brand.
9. Monitor Performance and KPIs
You can't manage what you don't measure. Make sure you're tracking your sale, profit, customer acquisition costs, KPIs and any other measures that matter to you as a business owner. By reviewing these metrics you give yourself time to adjust to any surprises that go against your assumptions.
10. Always Learn
Successful entrepreneurs are lifelong learners. Take a workshop, read a book, connect with other business owners, and get a mentor. More knowledge leads to better choices in business.
In Summary,
Preventing your business from failing isn't about being mistake free. It's about being purposeful, learning quickly, and adapt to change. Giving some thought to the 10 tips, you will mitigate risk, stability and mitigate risk, leading to the long term success of your business.
Success doesn't happen overnight, but with smart thinking, persistence, and management, your business can build momentum daily that result in a stronger business each day.
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