If one of your New Year’s resolutions is to finally start that business you’ve had brewing in the back of your mind, the odds are that you already have put some thought into it. However, there are many mistakes that new entrepreneurs make that you should seek to avoid. There’s a reason why only 50% of small businesses make it more than five years, and if you want to make your business last in the long run, these tips will help you succeed.
Think of What Makes Your Business Different
Successful businesses often fill a specific niche, and you should make sure that you’re thinking of what makes your business different from others while you’re developing your company. If there’s already an existing business that’s exactly the same as yours, there’s no point in starting a duplicate business. Instead, find something that makes you different from that competitor and capitalize on that difference. Whatever makes your business stand out will be what makes your business succeed, so make sure you know what that is.
Optimize Your Website
Online presence is very important in the world of business today. Many times, users will leave a website after only 10-20 seconds on the site. In order to make sure that potential customers stay on your site for long enough to find out more about your goods or services, you should optimize your website. Having high-quality content and potentially a blog can be helpful in increasing the time spent on your website, which can potentially turn into sales.
Start your business as small as you reasonably can in order to ensure its success. If you start with a product that is expensive to develop and expensive to purchase, you may find your business struggling. However, if you start with a cheaper product or service that is still high-quality, you can use the profit from that cheaper option to reinvest in your business and you can build up to more expensive options. If you start smaller, as you build your business and reinvest the profits you will also be gaining more dedicated customers who will purchase your more expensive products or services because they know what your company already sells. To avoid becoming a part of the 82% of failed businesses that fail because of problems with cash flow, you should start small.
Make a Business Plan
A business plan is key to making sure that you’ve fully thought through your business. A business plan can be used as a guiding light when you’re first starting your business, and it can also be used to attract investors for your company. Investors want to know that they’re putting their money into something that won’t fail, and a business plan shows that you are truly thinking through your plans and not just starting a business on a whim that is destined to fail.
A business plan should include the following things:
- Executive Summary. This is where you’ll talk about your business and why you believe it will succeed. You can include your business’ values and mission statement in this section as well. This is where you write down what your business is and what you’re about.
- Business Description. Describe here, in detail, what your business will be doing, who you will be selling and marketing to, and why you believe you will be successful.
- Market Analysis. Before you start your business, you should know who you’re selling to and who else is selling to that same market. The more that you understand the market that you’re starting a business in, the more likely you are to successfully enter that market. Make sure that you know who your competitors are and understand their business practices, and include that information in this part of your business plan.
- Management and Company Structure. The way that you plan to structure your company is important to investors and to successfully running your business. If you are working with anyone else, having a written description of what exactly their job is can be helpful in making sure that everyone knows exactly what they’re doing. You can also describe what makes each person the right fit for the job that they’re doing.
- What You’re Selling. This is the key part of your business, and in this section of the business plan, you can describe what services or goods you’re going to be selling. Make sure to go into detail describing the goods or services you’ll be offering so that any prospective investors can fully understand what they’re investing in.
- Marketing Plans. In this section, you’ll talk about how you’re planning on marketing your business and the results that you want from your marketing campaign.
- What You Want From Investors. If you’re asking investors for money, have a specific amount laid out and detail how you will use that money. Investors want to know that you know what you’re doing with their money — they don’t want to be making an investment into a business that will fail.
- Monetary Projections. Most businesses do not turn a profit right away. You should have a projection of when you believe you’ll break even and when you think you’ll be able to turn a profit and eventually pay back your investors.
Be Prepared For the Worst-Case Scenario
The reality is that half of small businesses fail in the first five years. If you aren’t prepared financially or emotionally for your business to fail, you probably aren’t ready to start it in the first place. Obviously, you are not starting a business with the goal of failing, but you should make sure that if the worst-case scenario does happen, you are not completely unprepared. This could mean that you don’t quit your day job until it’s financially realistic, you could have backup plans and savings to fall back on, or any other necessary planning you may need to do to ensure you do not face personal or financial ruin because of a failed business venture.
What do you wish you’d known before starting your business? Are you planning on starting a new business in the New Year? Tell us in the comments below.
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