The dream of opening your business startup can easily be shattered if you’re not careful. Within the first year, three out of every ten new businesses will close their doors. Within five years, fifty percent, or five out of every 10 businesses will go from dream to nightmare but it’s not a game of chance. Often, businesses don’t fail because their idea is bad. They fail for other reasons. What can you do to help insure that you don’t become the next failing business?
Do Your Research
It seems obvious, doesn’t it? Who would open a business startup without asking their potential customers if they would pay for the product or service? The facts are that too many perspective business owners don’t take that step. They may ask family and friends but they don’t do any formalized market research before getting started. Go out and talk to others who don’t know you. That’s the only way to know if your idea has staying power.
Sure, everybody has heard the old cliché, “location, location, location” and there’s no doubt that its true but does it apply to internet businesses? Absolutely. Before picking a company name or website URL, make sure that the name isn’t crowded. If you’re planning to sell books online and you call your business “the Book Place”, that may not be the best way to find internet real estate that isn’t crowded with other businesses that sell books. Find something unique.
Everybody business has to spend money but the goal is to keep expenses as low as possible. In the early stages of your business development, it’s a lot easier to save money than it is to make money. But there’s a difference between cheap and frugal. Frugal people get the most out of the dollars they spend while cheap people try not spend money at all. In order to succeed, you will have to spend money but you don’t need pretty office furniture or company shirts right now.
Plan for the Worst
Don’t dwell on the negative but do have plans in case something goes wrong. What if your income projections are too high or your product needs refining? What if a key piece of equipment breaks or an important employee quits? Have plans in place for each of those contingencies.
You don’t have to be one of those businesses that fail. First, make sure your idea is sound and after that, find your customers and provide extraordinary service to each of them. Word of mouth may become your best advertising tool. Finally, don’t forget to form an LLC. LLCs separate your business assets from your family’s assets.