Approximately two-thirds of all companies survive their first two years, according to the latest available data from the U.S. Small Business Administration. That’s why it’s crucial that you understand the nature of the business you’re starting and whether the market is large enough to sustain your existence. It also behooves you to know the strengths and weaknesses of your competitors. That said, following are some things you need to realize before starting your business.
Set Aside Enough Money
A lack of capital is one of the primary reasons businesses fail, according to Business Know-How. In reality, it can take you a year or two to turn a profit. So when you’re starting out, make sure you have enough money to cover your living expenses and funds you’ll need to stay in business.
Know the Law
Make sure you understand the regulations in your industry, taxes you need to pay and the licenses required, according to Forbes. Hire an attorney and accountant to ensure your understanding of all legalities and to help you structure your organization.
Expect Long Hours
You’ll likely be working 60 to 80 hours per week your first couple of years in business, according to Forbes. That’s why it’s imperative that you do something you enjoy or have in interest in.
Listen to Your Customers
Customers are the lifeblood of your business. If you don’t keep track of their needs, you won’t be in business long. Learn the sizes, scents, styles, and dimensions they want in your products. One of the best ways to stay in tune with your customers is to conduct market research surveys.
Create a Business Plan
A business plan is a blueprint of who you are and how you will conduct business. It should include everything from the products you sell to your marketing strategy and financial projections.
Technology changes and so do customers’ tastes. So if you want to stay in business, you must remain flexible. That’s why you don’t want to create a too tall of an organizational structure early on. It stymies progress because there are too many people required to approve certain strategies or policies. Moreover, avoid heavy overhead, according to Entrepreneur. Find ways to make cash quickly and demand payment upfront.
If you follow these strategies, you’ll dramatically improve your chances of staying in business. It also pays to hire people.