Does it seem like everyone but you is their own boss these days? With entrepreneurship easier than ever to obtain, all you need to have to start your own business is a dream and the passion to get started!
Getting your business on the ground is one thing. Building a successful one is a completely different story.
Statistics show that 20% of small businesses don’t make it past their first year. Nearly half will fail by the end of five years. But if you can make it to ten, you’re part of only 30% who succeed that long.
The good news is that you don’t have to guess what they are. We’ve got the roadmap covered for you with these seven critical steps to building a successful business.
1. Research the Need for Your Business
You might have an amazing idea for a business, but is there a market for it? That’s the key.
Many businesses will fail, not because they didn’t have a really great idea, but because they didn’t research it first. For example, say your plan is to start a bed and breakfast in your hometown. Before you invest time, money, and effort, find out if there’s a need for one.
Maybe the area is seasonal, and half the year you’ll be busy, but the other half will be dead. Or maybe there are tons of bed and breakfasts already, and the market is saturated.
You might think you know these answers. However, the best path to success starts with market research.
2. Have a Business Plan and Tweak It
Every business needs a foundational plan to start. In this plan, you as the owner will create an outline of goals you want to achieve and a timeline of when you want them met.
Each section of the outline might be a little bare at first. As you learn more about running a business, you can fill in steps to meet the goals, potential problems, and solutions to fix them.
3. Have a Contingency Plan
Some rare businesses turn a profit almost immediately. Starting your company with the intent to cover your overhead with sales right away is a fast track to failure, though.
Financial experts suggest that a business has three to six months’ worth of operating expenses on hand. Unless you took out a hefty loan or have a lot of starter capital, this isn’t an easy thing to do.
What’s your contingency plan for getting working capital during your slow season? Taking out another loan is digging a deeper hole.
There are lots of other alternative funding solutions available today, though. For instance, if your business invoices customers, you could look into accelerated payments as a solution to help with cash flow.
4. Have a Strong Marketing Strategy
When you’re just starting out, it’s often difficult to justify spending a lot of funds on marketing. However, that investment is exactly what you need to spread the news of your existence.
The majority of people look to the internet for advice before making a purchase. Your business needs a strong internet presence, and unless you plan on doing it yourself, that means a marketing plan.
At first, it might be more cost-effective to run your advertising ideas yourself. Quickly, though, you’ll see that paying someone else to handle it for you frees you up to invest the time in your company making even more money.
And when you hire someone who knows what they’re doing, the return on your investment pays off exponentially.
5. Be Flexible
You have a business plan that you’re supposed to stick to. And you already know what you’re selling to your customers. After you build your customer following, you may need to adjust what you’re offering.
Stick with what works, of course. But the world is constantly evolving, and so should your business.
This doesn’t have to mean major changes. Maybe there’s a new product out that goes perfectly with what you already sell and your current client base would buy it. That’s an easy inventory add-on.
Or if you only currently accept debit and credit cards online, adding the option to pay via PayPal or ApplePay could attract more customers.
Pay attention to what your target market likes and needs, and be willing to adjust for those.
6. Learn How to Network
Networking as a business owner is entirely different from personal communication. Now that you have your own brand to build, it’s important that you build a solid foundation of contacts.
Your immediate contact might not need your business (yet), but they could know someone who does. Keep your business’s reputation strong and actively refer your network to others within it.
When others see that you’re willing to share referrals with your customers and business contacts, they’ll refer people to you, too.
7. Have an Accountant and a Lawyer On Hand
There are a lot of legalities involved in owning a business. Your accountant will help you with all the tax advice you’ll need. A lawyer can guide you as you learn how to draw up contracts and other documents. They’ll also be handy if any legal questions arise.
There are a lot of lawyers and accountants who work with you on an as-needed basis. Others stay on a retainer with a monthly payment and you can ask them whatever you need, any time.
No matter how you choose to pay for your legal help, it’s money well spent. As with insurance, it’s better to have legal and tax advisers and not need them than to need and not have them.
To start your small business doesn’t take a lot of work. To make it a successful one, though, requires these seven critical steps. Follow them, and you can be in the 30% and beat the statistics!