Did you know that statistically, 50% of all new businesses fail after 4 or 5 years? That’s a staggering number when you consider the number of entrepreneurs in this world that are still giving it a go.
What’s even more eye opening is that regardless of the number of years in operation, a total 9 out of 10 will fail at some point in time. This means that even if you enjoy success early on, the odds are still against running a successful business.
Sounds pretty gloomy, right? However, the shocking statistics are more of a result of ill-prepared business owners than a function of actually owning a business. If you want to create AND maintain a successful and functioning business, then you need to pay attention to the four important tips laid out below
Create a Business Plan
The businesses that fail within the first few years can probably trace their failure back to a lack of direction and goals. You need to have clearly defined and measurable goals, and then a detailed path on how to achieve those goals. A business plan usually serves two purposes. First, it illustrates a path to success, and second, it’s usually required for any lender to loan you money if needed. Since most businesses require the majority of capital at start-up it’s a smart way to begin your business
Know When to Outsource
A common misstep made by many new business owners is that they try and do too much on their own! Delicate areas like accounting and finance take a technical professional to get the job done right.
If you mess up your year-end tax statements, the IRS could come back to haunt you years down the road with penalties and fees. By spending a few dollars up front you can save truckloads of money down the road. The same can be said with engineering, sales, and other areas of expertise.
Know What You Don’t Know
One of the greatest strengths any entrepreneur can possess is “knowing what they don’t know”. This goes hand-in-hand with the outsourcing tip mentioned above, but encompasses so much more.
There are plenty of professionals out there that offer insightful advice which include Felix Wetzel, Martin Couzins and Trevor McClintock to name a few. Each of these people share personal views on various business topics drawn from their own individual experiences and certainly make some good reading!
Spending some time reading online may help you pick up useful tips and advice from individuals such as the ones listed above and will certainly give you an edge over your competitors.
Know Your Product
Just telling someone to know their product may sound random and arbitrary, but it means so much more. Knowing your product means knowing your customer. You need to understand your target demographics and target market in order to understand the best sales channels to reach them.
Likewise, you will want to know what competition is out there that has a comparable product or service to you as well. Knowing the competition helps you stay one step ahead of them, while at the same time, learning from their best practices as well.