Starting your own business can be an amazing adventure. But today more than ever you need to be aware of why so many small business start ups fail to prevent you from making the same mistakes.
It is an uncomfortable fact of business life that four out of five start-ups end in failure, this can be for a multitude of reasons; however, the underlying issues are surprisingly common.
Give your new business venture a fighting chance by taking care to avoid these fatal errors:
Reason 1 - Cash Will Always Be King:
When money is tight and business may not be as abundant as it once was, conserving your cash resources is critical. Keep an eye on expenditure and watch credit control carefully. Make sure money owing to you is paid promptly.
When I send out an estimate, I always have our terms stating 'All work MUST be paid on day of completion'. When we know we are about to finish a job, I give our invoice to the customer on that day. We don't allow 30 days credit. Thankfully, up to now, it has worked.
Reason 2- Location, Location, Location:
Location is critical to the success of your businesses survival. A decent location can cost more but it can make the difference between just getting by and turning a decent profit. Don't let a cheap lease tempt you into opening your doors in the wrong neighbourhood if your gut is telling you it's not right.
Things to consider when choosing a location:
• Where are your customers based?
• Traffic, accessibility, parking and lighting
• Location of competitors
• Condition and safety of building
Reason 3- Keep Purchase Prices Low:
You need to know how to get the least expensive price on everything you purchase. This can make a huge difference. Use the internet to check prices, and then negotiate prices down with suppliers. Do not just accept the first price they give you.
Reason 4 - Never Stand Still:
An old mentor of mine once told me - if you never change anything, everything will remain the same. It is business insanity to do the same thing this year as you did last year and expect a different result.
Successful businesses innovate and change all the time - those that don't are simply left behind.
Reason 5 - Don't Give Up Too Quickly:
Any new business will be lucky to break even in their first year. Many people new to business often assume that they are going to make a fortune within 12 months. In reality less than 80% of new start-ups make a profit in their first year. Do NOT give up too easily.
Reason 6 - You Need A 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, their products and services? Later, additional ways to generate revenue on the website can be added; for example selling ad space on your website.
Remember, if you don't have a website, you' will probably be losing business to your competitors that do. Make sure that your website makes your business look good; -- you want to increase revenues, not decrease them.
Reason 7- You Need To Get Your Name Out There:
You need to advertise, customers can not walk through your front door if they don't know you're there. Learn how to cost-effectively advertise and promote your business through such tried-and-true methods as ads in local newspapers, Web sites, blogs, even by sponsoring a local little league team. The number of advertising and promotional ideas that exist is only limited by your own creativity.
By Mike Zane
It is an uncomfortable fact of business life that four out of five start-ups end in failure, this can be for a multitude of reasons; however, the underlying issues are surprisingly common.
Give your new business venture a fighting chance by taking care to avoid these fatal errors:
Reason 1 - Cash Will Always Be King:
When money is tight and business may not be as abundant as it once was, conserving your cash resources is critical. Keep an eye on expenditure and watch credit control carefully. Make sure money owing to you is paid promptly.
When I send out an estimate, I always have our terms stating 'All work MUST be paid on day of completion'. When we know we are about to finish a job, I give our invoice to the customer on that day. We don't allow 30 days credit. Thankfully, up to now, it has worked.
Reason 2- Location, Location, Location:
Location is critical to the success of your businesses survival. A decent location can cost more but it can make the difference between just getting by and turning a decent profit. Don't let a cheap lease tempt you into opening your doors in the wrong neighbourhood if your gut is telling you it's not right.
Things to consider when choosing a location:
• Where are your customers based?
• Traffic, accessibility, parking and lighting
• Location of competitors
• Condition and safety of building
Reason 3- Keep Purchase Prices Low:
You need to know how to get the least expensive price on everything you purchase. This can make a huge difference. Use the internet to check prices, and then negotiate prices down with suppliers. Do not just accept the first price they give you.
Reason 4 - Never Stand Still:
An old mentor of mine once told me - if you never change anything, everything will remain the same. It is business insanity to do the same thing this year as you did last year and expect a different result.
Successful businesses innovate and change all the time - those that don't are simply left behind.
Reason 5 - Don't Give Up Too Quickly:
Any new business will be lucky to break even in their first year. Many people new to business often assume that they are going to make a fortune within 12 months. In reality less than 80% of new start-ups make a profit in their first year. Do NOT give up too easily.
Reason 6 - You Need A 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, their products and services? Later, additional ways to generate revenue on the website can be added; for example selling ad space on your website.
Remember, if you don't have a website, you' will probably be losing business to your competitors that do. Make sure that your website makes your business look good; -- you want to increase revenues, not decrease them.
Reason 7- You Need To Get Your Name Out There:
You need to advertise, customers can not walk through your front door if they don't know you're there. Learn how to cost-effectively advertise and promote your business through such tried-and-true methods as ads in local newspapers, Web sites, blogs, even by sponsoring a local little league team. The number of advertising and promotional ideas that exist is only limited by your own creativity.
By Mike Zane
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