Starting a business is not a walk in the park. In 2013, a Bloomberg report noted that 8 out of 10 businesses fail within their first 18 months. Based on this number, it would seem that only the fittest survive. It is heartbreaking but entrepreneurs need not be scared because there are ways to avoid the mistakes of entrepreneurs from the not-so-distant past.
One of the biggest downfalls of small business owners is not understanding their customers. Building trust in your customer base is one thing but this can only be achieved if the business listens to its target market. When a business knows what the target market wants and needs, it is time to cultivate trust as this would help the business succeed.
Understanding Value Proposition
Value proposition is also important, according to Forbes. As businesses uncover their unique value propositions, they will also uncover their path to success. Having a unique value proposition is just the beginning though as businesses would need to communicate this to prospective customers. Working on your point of differentiation is hard but if your message is clear, concise, and compelling, you can expect growth.
However, whatever industry your business belongs to, one thing matters more than others – leadership. Without good leadership skills, the business can breakdown right at the top. This is followed by adapting the right business model and whether it gives a company enough revenue or not. If the revenue is not enough, change the business model as fast as you can so you can get over this hurdle. After all, being in business means generating profit.
Different countries have varying regulations when it comes to the red tape of starting a business. There are also comparisons to be drawn between the UK and the US and there are further differences depending on what state you’re based in. For example, if you are setting up an LLC California requires naming the LLC, selecting a statutory agent, filing articles of organization, and creating an operating agreement.
These requirements are followed by getting your EIN, keeping personal and business accounts separate, being on top of accounting, paying taxes, getting insurance, securing permits and licenses, and complying with employee regulations.
Although accomplishing all documentary requirements is difficult, raising funds for your startup is more time consuming than any other activity that you need to do for your new business. Expect this part of the process to test and hone your sales savvy.
It is important that you dedicate most of your energy into this at the onset because you will need to sell your business idea to prospective investors. This will help you fund your product launch and cover other expenses.