You have heard the scary statistics: 80 percent of start-ups fail in the first 18 months. In a Forbes article published in September 2013, entrepreneur Eric T. Wagner states “8 out of 10 entrepreneurs who start businesses fail within the first 18 months.” However, data released from the US Bureau of Labor Statistics shows a slightly brighter situation: if you started a small business 10 years ago, there is a 35 percent chance it is still in operation.
How can you ensure that your start-up is a success? The most important thing is to have a business plan and stick to it. A successful business plan should touch on the following areas:
- Set benchmarks on how you would like your company to grow over the years (for example, in two years, five years, ten years) as well as a strategy to offer new products.
- Establish a framework in which to share and explain business and growth objectives with management, employees, and new hires.
- Plan for internal growth, including new employees, space, and marketing.
- Set specific, obtainable objectives for management.
- Develop new alliances (with banks, other companies, etc.) to help guide your new business.
Once you have a well thought out business plan, share it with your family and friends. They need to know that you have definitive plans, that you are in this for the long haul, and that you have specific ways in which to make your business grow and thrive. It may take several years for you to draw a salary; typically, an entrepreneur will reinvest the profits earned into the business for the first year or two before drawing a regular salary. During this start-up time, you will need the financial and emotional support of family and friends.
Many start-ups fail because the owner tries to grow the company too quickly. One report states that as many as 74 percent of start-ups fail because they overreach. Be very cautious how you use your profits; don’t drain the budget and don’t throw money at a problem. It is also important that you surround yourself with capable people and let them help take responsibility for the company’s growth. Once again, use your business plan to guide your decision-making.
Finally, do your due diligence during the early years of your business. Reevaluate your goals on a quarterly basis and look at the numbers (profit, marketing, number of clients, etc.) to ensure that your company’s growth is sustainable. Do not count on “free” advice from the Internet. Make an investment in yourself and your company by seeking professional guidance when you are beginning and growing your business – you will reap the rewards!
If there is any way I can help in the initial stages of business planning, don’t hesitate to contact me.
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