According to Dun & Bradstreet and INC. magazine, 33% of all new businesses fail within the first six months. Fifty percent of new businesses fail within their first two years of operation and 75% fail within the first three years.
Don’t be one of the statistics! Here are a few guidelines for opening a success small business:
1. Have a Business Plan: You’ve heard the saying “If you don’t know where you are going, how will you get there?” Too many business owners start their business without a plan. They simply “open their doors” for business and then expect to succeed. Before starting your business, develop a Business Plan. Your plan will identify what you want your business to accomplish – the “where you want to go”, and the strategies that you will utilize – the “how you will get there”.
2. Set Operating Goals and Objectives and Evaluate the Results: While it is important to have a Business Plan, it is also very important to have specific goals and objectives for the first twelve months of operation. In your planning process, create goals and objectives to build your business. Once a business starts operating, often the owner becomes too immersed in the ongoing daily activities to take the necessary time to evaluate the progress of the business. Measuring against the identified goals and objectives will tell the owner whether or not modifications and alternate strategies are required.
3. Understand the Industry and position your company accordingly: Some business owners start their businesses before fully investigating the industry. Consider these points:
- What are the trends in your industry – is it growing or declining?
- What are the opportunities and what are the threats?
- Will new technologies have an impact on your industry?
- Where can you position your business in this industry in order that your business will succeed?
- What differentiates your business from your competitors
- what advantages can you offer customers?
4. Identify your Target Audience: Some business owners open their doors for business without taking the time to understand their target customers (buyer demographics and psychographics, how they buy, what they buy, when they buy, what motivates them to buy and where they buy). Do not expect that just because you are now in business, that customers will flock to your door. If you do not understand your target customer, how do you expect to effectively reach them?
5. Have a Marketing Campaign: You have to announce to prospective customers that (a) you are open for business and (b) why they should want to deal with you. By understanding the demographics and psychographics of your target customers, you can identify how to best reach them. . Effective marketing is often what separates rapidly growing companies from slow-growing or stalled companies that started at the same time, serve the same market and offer similar merchandise. Successful campaigns tend to be carefully researched, well thought-out and focused on details and execution, rather than resting on a single, grand idea. There are numerous ways in which you can market your business professionally and cost effectively
6. Know your Competition: Before starting your business, attempt to obtain information about and to understand the cost structure(s) and selling prices of your competitors. If the target audience is comparable, study their marketing practices for a quick start to what is successful and not; determine how your business can stand out and be competitive.