Every year, many people start businesses, and many of those businesses do not make it past that first year. Success results from many factors, including hard work, persistence, having a great idea and luck, but there are steps you can take to increase the likelihood of success.
Write a Business Plan
One common error many make when they decide to start a business is that they do not identify the competition, perform competitive analysis, and learn how they can set themselves apart from it. If you are starting a pet sitting company, how will you be different from all the other pet sitters out there? What can you offer that they can’t? To answer this question, it’s important to look at both the competition and your potential customer base. Creating a business plan will help you answer other questions as well, such as how you plan to market your company. For many, this process reveals blind spots that they might otherwise have missed until they became a problem and makes it possible to address them before launching.
Get Adequate Funding
Yet another issue that needs to be addressed in the business plan is where your money will come from. How will you make sure you have adequate cash flow? What will you do if that cash flow is threatened? Where will your initial funding come from? One source you may want to look at is a small business loan, especially if yours is the type of venture that may struggle to get financing. One advantage of this type of loan is that it can come with additional perks, such as coaching and support.
Choose the Right People
Surrounding yourself with the right people is another key to your success. First, if you are going to have one or more partners, you should all complement one another in terms of your individual strengths. You should also be able to work together effectively. This should go without saying, but conflict between the owners can often cause businesses to fall apart. Next, you should hire the right people. These should be individuals who are committed to your company’s mission and who will fit in with your workplace culture. The right people supporting you will also help you find ways to destress because they will have your full confidence during times you take a step away. Finally, you should network with others in your industry for professional support.
Have Contingency Plans
There are exciting stories about steering companies through difficulties and surviving by a hair, but this is really not an ideal way to run a business. You can’t prepare for everything, but you should think through some of the problems that you are likely to run into and what you will do when they happen. What these might be will vary based on what sector you are in, but they might include a sudden drop in your customer base, supply issues or a disaster such as a fire. In addition to plans for specific issues, you should also have an overall crisis plan for unspecified problems. The difference in a successful and unsuccessful business is not that the former manages to avoid all problems but that they deal with them effectively.
