Running a business is one of the most difficult endeavors a person can take on. This is borne out by the fact that 50 percent of businesses fail within the first five years. It’s certainly a risky endeavor.
Still, despite the risks involved, there is a great chance you could achieve success with your business. This could mean creating great wealth for your family and a business empire that can be passed on to your children. You may even be able to go public. There are endless possibilities. However, you need to avoid many of the pitfalls that failed businesses fall into. Below are some tips that can help you put your business on top.
Have a Good Idea
You shouldn’t be going into business just to go into business. If you want to just copy some other business already in the market, chances are you will struggle to gain a foothold against that established competition. Instead, you need a genuinely good idea. While you don’t have to invent something entirely new, you need at least an original spin on an existing product or service. That way, you can set yourself apart in the market and create your own niche of loyal customers.
Know Your Competition
However, even if you think you have a truly original business idea, you will likely have direct competitors. Chances are there are already businesses that offer similar products and services you will have to contend with in your market.
Some of these competitors may be extremely well established. If you want to sell submarine sandwiches, for example, you should certainly do some research on Subway. Subway currently has over 42,000 locations. While you may not want to replicate what Subways does, it would certainly be wise to learn about how they do business so you can adapt to the competition they will provide you with.
Make a Business Plan
While having a business plan may seem like an obvious choice, far too many businesses go without one. A business plan is integral. It will act as a blueprint for your entire operation. It should include an explanation of what your company’s goals and aspirations are. Even more importantly, it should include the exact calculations you plan to use to create a profit that takes into account things like revenues, overhead expenses and other costs.
Many businesses never create a business plan that works. As a result, they struggle to make a profit from month to month. Having a firm business plan can certainly make this easier. You should also have one in case you ever want to ask for money from a bank or other lender to help fund your business. Most will not lend you money without one.
Create a Marketing Plan
However, you won’t sell any products or services if consumers never learn about your business. The process of presenting your company to the public and informing consumers of your business is known as marketing. If you want your company to be successful, you need to devise a marketing plan. According to the Small Business Administration, you should spend two to five percent of your revenues on marketing.
Different companies require different kinds of marketing. A business that targets only a local audience may want to invest in billboard space and airtime at a local radio station. An internet based business, on the other hand, may want to invest a lot more into SEO and digital advertisements. If you aren’t sure what kind of marketing your company needs to succeed, you may want to acquire assistance from professionals by hiring a marketing agency. They should be able to help you craft a marketing plan that is tailored to your company’s own individual needs.
It is true that a good percentage of businesses fail. However, you don’t have to become part of this statistic. Instead, put a lot of effort into the research and planning phase before launching your company. This will help you avoid many of the pitfalls that other business owners fall into.
by: Dennis Hung