Starting your own venture and going it alone is one of the most exciting, rewarding and valuable ventures anyone can hope to do, and one that can lead to the financial freedom employees stuck in the corporate machine can only dream of. However, it ain’t easy to be successful.
Anything that offers the chance of a great reward comes with great risks too. That is how life works; it is yin and yang, actions and reactions, contrary forces working with and against each other. What’s more, it is these risks that tend to see a lot of small business become financial failures, and quickly too.
However, while most of these risks can be fatal to a business, most can also be avoided, and we are going to cast a light on which ones these are.
No Business Plan
Having a plan is one of the most crucial instruments a business owns. You see, a business plan is where you detail everything you hope to achieve with your business and how you plan to go about achieving it all. Your short terms hopes and long term goals, your financial predictions, your funding requirements, the markets you plan to target and which marketing strategies you are going to use to target them all factor in. It is your guide and, without one, it becomes far too easy to get lost.
Bad Marketing Decisions
To cut back on marketing to try and save money is like stopping your clock in an attempt to save time. Small businesses need to market themselves and their brand from the get go onward. Digital marketing, direct mail, promotional offers, word of mouth, social media, email marketing, referral schemes, discounts for existing customers; all of these are marketing channels that your company should explore. Trial and error.
Competition is more fierce than ever these days, and so the need to invest in marketing and promoting your business through the right channels is imperative to you surviving and thriving.
Going It Alone
Most first-time entrepreneurs make the same mistake of trying to go it alone. Sometimes it is a matter of pride, other times it is a matter of funds, but it is always the same result. As the owner of a small business, you are going to have a lot of plates to spin and keep spinning, and most of these plates will fall outside your comfort zone.
You may have a knack for marketing, but not bookkeeping, which is why you will need a team of people that can balance each other’s skill set out. Employee management, advertising, public relations, financial responsibility, sales; all of these things matter, and you can’t do them all alone. Trust me on that.
Not Enough Money
Another common denominator in the what makes small businesses fail is the lack of capital. All too often, entrepreneurs think they will start turning a profit the minute they open their doors or launch their website, and that just isn’t the case. That is why it is so important that you consider every single possible overhead you can, and work backwards from there.
Rent, employees, utility bills, equipment, fuel; absolutely everything needs to be considered. Once you’ve done this, aim to raise enough money to keep running even if you don’t make a dime in your first year. That’s the kind of risk you need to be protecting yourself from.