There is nothing more exhilarating than operating a business and making it work! But, there also is the glaring statistic that 80 percent of small businesses fail in the first three years and 90 percent by the fifth year. But what about the remaining 10 percent? At the age of 64, Colonel Sanders started Kentucky Fried Chicken, which blossomed into a multibillion dollar business now called KFC. There will always be the exception, so why not you? If your business is well planned, you can beat the odds.
The three principal reasons most businesses fail are:
1. The product or service does not meet the market’s needs. You will need to do market research to determine how your product or service will satisfy what people are buying. Study your competition and see how the more successful companies are selling and marketing their offerings. Avoid the pitfalls of the unsuccessful ones.
2. They are undercapitalized. Making a budget and business plan are essential to the success of your venture. Planning your short- and long-term financial needs and cash flow can prevent you from running short of resources.
3. Management is not up to the job. A wise entrepreneur has advisors that will help him from making wrong decisions. Key advisors could include a CPA and a business or licensing attorney plus any special experienced professional related to the business.
Businesses can be divided into two basic categories: services and products.
In a service business you will be providing something for your client that includes special skills. Examples include consulting, accounting, training, selling, designing, desktop publishing, plumbing, contracting, electrical repairing, painting, gardening, catering, writing, cleaning, babysitting, dog walking, nursing, purchasing and delivering.
On the products side, your primary concern will be with manufacturing or purchasing finished articles. Examples include crafts (jewelry, pottery, leather, apparel, decorations, gadgets, furniture), publishing, baking, restaurants, computers, software, appliances, tools, hardware and garden supplies.
Choosing the type of business you want depends a lot on your personal interests, skills, natural aptitudes and ability to learn. An important rule to follow is to always identify a need that you can satisfy. Just as in job search, job-seekers succeed when they find an opening and sell the company on their qualifications (skills). The same principle applies in starting a business. Find a need and fill it!
Do you have the entrepreneurial spirit?
Success comes to those who are willing to work for it, not just dream about it. Winning entrepreneurs are:
Tenacious: They stick to a plan and never let go. When they find a roadblock, they find a way around it. Impossible is not part of their vocabulary.
Resourceful: Finding out what is needed and getting the information the first time.
Hands-on: They do not put off for tomorrow what can be done today. They are not afraid of long hours. They do not ask anyone to do anything they would not do themselves.
Planners: Before leaping, they know the terrain. One of the quickest ways to fail in any business venture is to shoot from your hip.
Coachable: If they do not know something, they learn it.
Risk Takers: But, not blindly. They minimize risks by knowing the odds!
Innovators: They do not wait for opportunities; they go out and create them.
Commitment: Whatever it takes, it will be done.
If you do not identify your feelings with the above, think twice before going into business for yourself.
- Entrepreneur Magazine has put online numerous tools, including sample business plans for anyone interested in a business of their own. The more you prepare for all contingencies, the better your chances for success!
- SCORE - Counselors to small businesses. Here you will find extraordinary assistance in getting your business started and funded, with even your own personal coach. It is a free service with branches throughout the U.S.A.
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