Recent study from the United States Bureau of Labor Statistics suggests that small businesses have the highest failure rate in the first two years. Most of these businesses have a 50/50 chances of surviving the first 5 years. This does not reflect the diminishing possibility of living the American Dream, but it is the results of ignoring the top 10 crucial factors in starting any business.
1. What is your WHY?
Most businesses were started for the wrong reasons. Many people decided to start their own business just because they did not like their current job. So instead of creating an enterprise, they ended up creating another job for themselves. Instead of working for other people, they have work for themselves.
2. Long term vision
Building a successful business is hard but not impossible. Most of the times, when we have to make certain changes in our lives, we are immediately faced with temporary setback. Some people can be bugged down easily by these challenges. A long term vision is required to keep you motivated over temporary defeat. Understand that everything happen for a reason. Embrace every experience and you will discover miracles.
3. Focus on adding value
We get paid in direct proportion to the value we created to the marketplace. People pay for product and services that can help them save time, energy, make more money and be more productive. How can you contribute to these wants? Ask yourself how you can create more value to your customers.
4. Working in versus working on the business
A business is not another job. A business is an enterprise that generates profits with or without you. You need to make a clear distinction between self-employed and business owner. A real business owner has a system that works for him, rather than him working in the system.
5. Lack of Capital
Money capital is the life blood of any business. Having sufficient liquid asset allows your organization to invest in resources that can help you to create more value to the marketplace.
6. Poor sales
Many business do not have cash for only two reason,poor sales and poor sales. You need to draw out a plan how to generate sales and revenue. You need your cash to operate for your business. Read books on sales, take home study courses. A great sales person can sell the most mediocre product in the world.
7. Poor Marketing
Most businesses have poor sales because they have poor marketing. The function of marketing is to make selling unnecessary. It is fundamental to the growth of your business. Study your market, the demographics and how they make their purchasing decision. You can have the greatest product on the planet, but with mediocre marketing skills, there will be no sales.
8. Poor Management
Management is a process which includes planning, organizing and leading. Set realistic goal. Take manageable risks. Control your expansion and monitor the revenue streams. Make appropriate changes when necessary such as decreasing expenses, increasing income, or seeking advice from professionals.
9. Poor timing
Timing is everything: Provide the right solution at the right time and to the right market and you will win big time. But you must do your homework. According to Brian Tracy, an hour of research can reduce your production cost of $10. Read everything you can about your industry, subscribe to periodicals, magazines, newsletters and etc. Make decisions very carefully. Gather all necessary information you need. Making decision without having enough information is no different that being ignorant.
10. Inconsistency
Perhaps consistency and persistency should be considered the most crucial skills for a new business manager. You must decide in advance the commitment you are willing to make for your business. Decide the amount of time and money capital you are willing to allocate to your business. You are now a leader of your organization. The destiny of your business lies in your hand.
“A journey of thousand miles starts with the first step.†– Chinese Proverb. Do it!
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