Business ownership is exciting.
Per the U.S. Bureau of Labor Statistics, businesses opened in March 2014 still had a survival rate of 69.4 by March 2016.
These numbers are promising, especially if someone is considering a new business for sale or they want to start a company from the ground up.
There are things you can do as a fresh entrepreneur to give your business startup the best chance, and most of them are easy to implement.
In the United States, 543,000 new businesses start per month, but only seven out of 10 new firms survive the first two years. Half make it five years, and one-third last a decade, per Forbes. While the numbers are not always promising, it is often because budding entrepreneurs make the leap too quickly; without considering all the facts.
5 Expert Tips for a Fresh Startup
- Be Passionate about Your Startup Idea
A new business might fail. While they may not close their doors, they may not hit sales goals for the quarter or their latest advertisements may flop. If you have passion and believe in what you are doing, these failures are minor stepping stones.
Starting a business takes more hours than you may realize. When you are passionate, those hours will not be as much of a burden. If you are not, stop before the burnout sets in; this may not be for you.
- Have a Business Plan
A business plan outlines your future objectives and has a strategy for achieving goals. Writing one is difficult, and it does take research. However, the more thorough you are with your plan, the more successful you will be.
The U.S. Small Business Administration has a detailed guide for getting started.
- Make Sure There is a Market
Selling what you want to sell will not help you succeed. Instead, you must sell the products people want to buy. You need market research to ensure there is a market for your products or services; you must know the companies you will compete against before assuming your new startup is a winner.
- Start the Cash Flow Early
As a startup, cash flow is essential. You may not have the cash reserves to front the costs of operations. Depending on the type of business, you may need to request deposits. The deposit amounts usually cover the cost of materials; that way if the customer cancels, you are not out the money you spent for the transaction.
- Plan with Gross Overestimates
It is better to have a highly conservative plan than assuming the best. When you overestimate expenses and make those estimations work in your budget, you can reward yourself with the extras at the end of the year.
What expert tips do you have to share with new entrepreneurs? Any lessons you learned from your startup experience?