When you’re starting your own business, there’s no guarantee that it is going to survive, especially in today’s fast-paced business world.
Nearly half of all small businesses fail within the first two years of operation. There can only be two reasons for business failure: first is inadequate planning and secondly, under-capitalization.
So before you go into debt financing your business, you need to know if it is going to do more than survive — you want to know if it’s good enough to thrive! Here are three things successful businesses that have stayed in business for five years or longer have in common:
A successful business start-up always starts with an idea. Something that makes your business stand out from all the rest. So how do you know if you’ve got a good idea?
You’ve probably got a good idea if you can answer yes to any of the following questions: Does your idea provide the solution to a significant problem for your target market? Does it satisfy a need or want? Does it create an opportunity?
The most successful businesses either fix problems (either real or perceived), or they increase your customer’s pleasure. They create a repeat need for a product or service among the target market.
Your chances of survival are better if you can answer the following questions with a yes: (1) Is there already a market for your product or service? (It’s much easier to fill a need than trying to create an entirely new market.) (2) Can your target market afford to buy your products or services? (If they can’t afford it, it doesn’t matter how great it is, you won’t sell any!) (3) Will your target market perceive your product or service as valuable? (If they want it, but don’t think it’s worth what you’re selling it for, you won’t make any sales.)
Do you have the people, the resources and the knowledge to be able to consistently provide your products or services to your target market? Can you maintain a competitive advantage? Do you have enough manpower? Can you purchase the supplies and materials you need over the long run?
The solid business plan you will create should be a living, breathing roadmap that helps you make sure you’re on course and reaching the goals that you set for your business.
Having enough capital to be able to keep your business afloat is also vital to your survival. When you’re creating the financial analysis of your business, make sure you’re being realistic about costs and expenditures, so that you give yourself the cushion you need to succeed.
Look at other successful business models as your guide. Why are they successful? What is it they’re doing that is working? What attributes do you admire, and why? You stand a better chance of succeeding if you’re modeling someone who is already successful.
Find the best help through a mentor. Rather than ignoring your weaknesses, find a coach who can help you either build your skills in your weaker areas, or offer advice for getting what you need. If not, there are many resources and tools that can help you figure it out!
If you take the time to plan to succeed, you could be creating a legacy that will be enjoyed by future generations, and that other entrepreneurs will look at as a model for building their own businesses.