According to the Small Business Administration (SBA), only seven out of ten new businesses actually succeed for the first two years and about half of those new businesses survive for five years. These statistics are actually a lot more promising for small business developers, but you still don’t want to end up on the wrong side of those statistics. The following tips can help you to avoid common mistakes that can take down young businesses before they have a chance to take off.
Pitfall #1: You don’t have a website
Consumers find most of their information on products online. To succeed in today’s technology-driven culture, your new business needs a website. More than three quarters of the United States’ population uses the internet and the number is growing exponentially. You website should not only exist, but it should reflect your business in a professional way. If your site looks amateurish, you could put off prospective clients. You don’t have to spend a lot of money on your site especially as online options increase. You can find great free platforms to use online.
Pitfall #2: Your eyes are bigger than your stomach
It’s not exactly the right idiom, but the expression reflects the kind of dangerous enthusiasm that can be backed by good intentions. New businesses often get a little ahead of themselves when they take on too much too fast. Overexpansion is a leading cause of new businesses failing. It’s important to avoid repressing growth when growth is due, but you’ve got to makes sure that your customer base is solid, you have high cash flow and your making educated (not imaginary) projections about possible benefits from growing your new business.
Pitfall #3: You’re not following the plan (or you don’t have a plan)
Some new business owners jump into their business with a loose idea of what they want to achieve and the idea that hard work will always triumph. Working hard is undoubtedly crucial to a new business’ success, but without a well-laid plan, your hard work will be in vain. If you don’t have a developed business plan, sit down and write one now no matter how far into the business you’ve moved. Even if you started one business plan when you started, you may need to consistently review the plan to make sure that it’s still a viable and up-to-date plan.
Pitfall #4: You set up your business in the wrong spot
The expression, location, location, location, well, it’s true. Location is really crucial to your business’ success. If customers anticipate a fight when it comes to parking, they’re going to start avoiding your place, no matter how attractive your goods and services are. People are on the run, and if they know there’s a challenge ahead, they’ll find an easier route. Likewise, if your clients live in a different area, you may consider maintaining their loyalty by moving nearby.
Pitfall #5: You don’t have enough capital
Many businesses fail because they didn’t set aside enough money to operate. Make sure that you have more than you anticipate. Make sure that you have enough money to cover at least three months of expenses. Also, make sure that you have enough money in case of emergencies.
Pitfall #6: You’re not managing the business well
Poor organization, lack of planning, and failure to maintain quality control will drive your business into the ground before it’s even spread its wings. If you’re not going to manage your business yourself, make sure that you choose someone with experience and people skills. A good leader is crucial to the success of your new business.
Many new business owners are cautious and rightly so, but the odds are more in your favor than you might think. If you anticipate your challenges, you can be more successful than you might anticipate.