16th: Learn why small businesses fail
Aug 14, 2023
Entrepreneurship is risky but isn’t that risk worth taking? Imagine building something of your own and passing it on to your next generation.
You can successfully reduce the risks associated with establishing a new business by preparing yourself thoroughly. Here are a few tips that may help you-
- Do not start a business because you are passionate about an idea. Do thorough market research and find out if there is actually a demand for your products/services. Evaluate the market share of your competitors. If the market is already saturated, it may not be possible for you to own a thriving business even when you provide something more affordable or extraordinary.
- A common mistake that small businesses often make is they only estimate the cost of starting a business. They do not estimate the cost of staying in the business until they start generating enough revenue to meet their operating costs. This cost could vary depending on what you are selling, the demand for your services, how well you perform, and a few other factors. Sometimes it could take a year or two to start meeting expenses. Are you prepared for it? Do you have a plan to start generating income as quickly as possible? If not, that's what you need to work on.
- Do you have a solid marketing plan? Have you selected the right location where there is a high demand for your products? Have you hired the right people who can provide top-notch services right from the beginning? Do you have a strong management that is ready to handle all forms of challenges? Have you studied your competition well and what they are doing to retain their customers? Before you start or expand your business, you must have clear answers to these questions.
Thorough research, planning, and patience can help you become one of the 33% of small businesses that manage to survive (and grow) beyond 10 years.
