Are you a new business or have an idea for a new business? Are you motivated to start marketing? … Excited about your idea? … Envisioning the profits rolling in? Congratulations! But here’s the bad news … unfortunately, the odds are not favorable for your enduring success.
The Small Business Administration (SBA) keeps the stats on business failures and claims that more than half of new businesses will disappear in the first five years. Other statistics say its much higher, up to 80% in the first five years, and 90% over ten years. And in some industries, the statistics are far more grave. “Restaurants only have a 20% chance of surviving 2 years,” according to Dun & Bradstreet.
Regardless of the odds, over 500,000 small businesses are started each month! The recent high unemployment rate has contributed to an unprecedented surge of entrepreneurs, since those long-term unemployed needed to generate income in whatever ways possible, even if they have to become their own job creator. For some though, it has been a long-time dream to run their own business, to be their own boss, to pursue their innovative business idea, and to reap the benefits of their hard work and investment.
So here are a Few Tips to Beat the Odds
- Be honest about your Business Idea. Most new businesses fail simply because of bad ideas. Take a honest look at the product or service you plan to sell, and the market you are targeting. Is it something they need or at least feel they can’t live without (even in a depressed economy)? Is there a lot of competition in your industry? If so, how does your idea set itself apart from your competitors? If your business has a storefront, how accessible are you and is your product affordable and sought after in your area?
- If you can’t be Objective, do Research. Entrepreneurs are often so passionate about their ideas, they can lose objectivity. Get feedback from your potential customer base through surveys and market research (social media is a great outlet for this). You can gather information from industry associations, Web searches, periodicals, federal and state agencies, and so forth. You may discover that there is not enough demand for the product or service at a price that will produce a profit for the company, but at least you found that out before you wasted time and money.
- Think big but spend small. The biggest reason small businesses fail is money, and the lack thereof. If your profits do not meet your expenditures, then you are not going to stay open for long. In the beginning, its imperative to keep your overhead as small as possible. If you’re just starting out, you may have to wait on the latest technology, the high-end office furniture and a lease of the over-sized posh office or retail space in the trendy part of town. The most successful businesses start small and expand as their business grows. There are so many ways to present your business professionally, get your name out there and still save money; so be creative and take the time to find bargains in all aspects of your business’ needs.
- Write a Flexible Business Plan. A business plan is a great way to keep your vision and innovation organized. It should be realistic and based on accurate, current information and educated projections for the future. (Most bankers request a business plan if you are seeking to secure addition capital for your company.) But be prepared to accommodate the changes in technology, consumer demand, and competition. “Long-range planning works best in the short term.”
- Get your name out there. “If you build it, they will come,” is a great tagline for a movie but unfortunately more is involved in the real world. In addition to your business plan, you need to write a strategic marketing plan. Define your target audience and research where they pull information. Radio, TV, and print ads may be too costly for new Startups, and are sometimes ineffective depending on your customer base. Taking the time to utilize social media, blogging, email marketing and a dynamic web presence can be affordable ways to bring customers in the door. Also, get involved in the community and use every opportunity to network you business. So it goes without saying …
- Have a Professionally Designed Website. Simply put, if you have a business today, you need a website. Period. At the very least, every business should have a professional looking and well-designed website that enables users to easily find out about their business and how to avail themselves of their products and services. Remember, if you don’t have a website, you’ll most likely be losing business to those that do. And make sure that website makes your business look good, not bad — you want to increase revenues, not decrease them.
- Customer Service is Key. The best way to spread the word in the beginning is through customer referrals, so its key to make a good impression. If in early days of operation, you or your staff appear flustered, disorganized and unprepared, or come across as rude or frustrated as a result, your first impression will unfortunately be a lasting one. And people are more than eager to share their bad experiences more so than their good ones. Remember offer service with a smile, the customer is always right and bend over backwards to accommodate their requests, especially in the early days.
- Adjust, Improvise and Revise as Needed. No business is static in today’s world, so you will need to make changes as the market does, especially if your sales start to wane. Good communication with your customers will advise you when adjustments in your business plan, marketing plan, and/or the product or service you offer is needed. Through your website and social media, you can monitor the changing needs, opinions and feedback of your target market by the use of surveys, questionnaires, contact forms and blog posts. So listen carefully and keep an open mind.
- Be Ready to Expand. Overexpansion can happen of a business owner confuses success with how fast they can afford to expand. Slow and steady growth is optimum. If you have an established solid customer base and a good cash flow, let your success help you set the right measured pace. Some indications that an expansion may be warranted include the inability to fill customer needs in a timely basis, and employees having difficulty keeping up with production demands.
- The Secret to your Success is YOU. When it comes to the success of any new business, you — the business owner — are ultimately the “secret” to your success. With the same drive, determination, and a positive mindset that drove you to start your own business, you will face any setback as only an opportunity to learn and grow.
Most self-made millionaires possess average intelligence. What sets them apart is their openness to new knowledge, new relationships and new opportunities as well as their willingness to learn whatever it takes to succeed. “Successful people do all the things unsuccessful people don’t want to do.”
Written by: Nicole Mueller, owner and web designer of Startup Production, who’s been in business for over 14 years!