A sound strategy based on verified facts is necessary for running a new business. While it is usually possible to get your business off the ground, there are always factors that may impede your dream of being a successful entrepreneur.
According to the U.S. Bureau of Labor Statistics (BLS), 65% of businesses fail within the first ten years. Here are six important things to keep in mind before starting a new venture.
1. Strategy is key:
According to the BLS, 20% of new businesses fail within two years. This suggests that high failure rates are primarily due to poor planning, a lack of knowledge about what it takes to start a company, or insufficient funds during critical stages of development such as marketing campaigns, product design and development costs, and staffing decisions.
Businesses should be based on good research and planning, like getting enough money, setting up the right structure, and putting together a good team to run the business.These are all factors that can significantly impact growth and success for any firm.
It is essential to have a strategic business plan to know what you’re getting yourself into before taking such major steps towards becoming your own boss; learning about potential pitfalls ahead of time will better prepare entrepreneurs when making strategic decisions. If done correctly, starting a business may take longer than expected, but it can bring tremendous rewards once everything falls into place.
2. Be wary of crowdfunding.
Crowdfunding can become your worst nightmare if you fail to gather enough support. If your startup fails, you risk losing the public’s trust in your organization and that of individuals who have pledged money to you.
Also, if you don’t protect your business idea with a patent or copyright, someone could find it on a crowdfunded site and steal it.
3. Get online:
Consider your customer base and how much it will contribute to revenue generation. According to FitSmallBusiness, 54% of consumers prefer to buy online rather than make purchases in person at brick-and-mortar stores or other physical locations like malls or exhibition centers. When you realize that this is the case, running a business with an online presence becomes crucial.
4. Optimize for flexibility:
Baymard recently found that shopping-cart abandonment on e-commerce websites stands at 69%. For that reason, you must make sure your website functions properly before launching, even more so if you plan on offering multiple payment options like PayPal or Google Wallet (not everyone will be willing to pay with a credit card).
Finally, there are specific tools and tactics that new businesses should avoid when they first launch. For example, using social media marketing too early in the process may not always work out for new firms since many consumers still prefer websites other than Facebook or Twitter.
5. Plan on going public: A new study by Deloitte recommends preparing for an IPO 18 to 36 months in advance of the anticipated IPO date. Therefore, when the market conditions are right, having the proper documents in place will help when launching your IPO.
6. Having a Plan B doesn’t hurt:
Even with all of this knowledge and planning, some businesses may still fail because of things they can’t control, like a bad economy or a lack of interest in their products or services.
This is why it is essential to have an effective Plan B on hand if things are not going smoothly. Adaptability is critical; it’s important to remember that passion alone won’t cut it.
With these tips in hand, you’ll be ready for the most success before you start your business and won’t be just another statistic of a failed business.
Courtesy: The Entrepreneur