A business often sparks from noticing a need or niche. Starting a business is an exciting moment, but a careful plan is what will allow your business to endure. Roughly, 20% of small business startups fail within the first year. Only about 30% are still in business by their tenth year. These statistics are not meant to discourage entrepreneurs, but rather to encourage them to plan for the longevity of their business. Many businesses with good ideas have failed and generally their failure has nothing to do with their business concept. At Fricke & Associates, LLC, we specialize in equipping new business startups with the tools needed to survive and thrive. If you have a business idea already, consider these success steps to help guide your business planning.
· Get Cash Flowing—A new business can have many expenses at the beginning. Whether from an investor or your own savings, having some financial cushion as you get off the ground can be helpful. Purchasing your needed equipment and products will add up fast. Also, you will likely have rent payments, utilities, employee payroll, etc. to pay too. You need to manage your finances to get out of the red and turn a profit as soon as possible. Digging out from debt can become nearly impossible if it builds up for months. If you notice a particular product or service generates the most income, focus your efforts on the money makers.
· Create a Profitable Business Model—Success as an entrepreneur rarely happens by accident. You need to create a business model that accounts for your expenses and demonstrates how your concept will be profitable. The more detailed you can be with calculating expenses, ongoing and one time, the more accurate your model will be. If you need support with evaluating your business model, our team can help. We have helped businesses of all types get off the ground smoothly.
· Know Revenue Generators and Keep Costs Low—Try to not be too emotionally invested in your services or products so you can objectively determine the true revenue generators in your business. You can analyze this based upon the cost for you to provide the product or services and how much you can charge for it. Keeping costs low will help you maximize your profits. However, make sure that you do not sacrifice your quality for the sake of cost when it counts. A sustainable business has to offer products or services that customers will be pleased with and want to purchase again. Sometimes, the best way to determine the products or services which will be successful is through trial and error. Keep a close watch on your sales to determine whether a product or service is worthwhile to offer or if it should be eliminated. Keeping costs low at the start of a business could mean anything from offering a more limited selection of products or having a smaller staff. Scaling up your business and staff gradually will be wiser and safer for the longevity of your business.
· Learn From Other Successful Owners—Learning from another business owner’s triumphs and failures is wise. If you can learn from their mistakes, you may avoid some challenges along the way. If you are looking for a successful owner to emulate, you could read a book written by a successful entrepreneur or you could approach an established local business owner. A local owner may not be the head of a million dollar company, but they may have greater insight into your potential customer base. Also, they will be aware of challenges within your area to prepare for. Our team at Fricke & Associates, LLC can also offer insight from our experience with successful business owners. Since we have partnered with so many owners as they started their businesses, we have gleaned considerable experience and information.
If you have a creative idea and a desire to be an entrepreneur, schedule a consultation Fricke & Associates, LLC. Our new business startup services will help you build the foundation you need to be successful long-term.