Almost all entrepreneurs experience failure — not just once, but multiple times. Business is risky, and sometimes those risks escalate to cost business owners time, money, energy and their dreams of success.
Unfortunately, the reason so many entrepreneurs fail is their belief that it can’t happen to them. You might be having this very thought — that you will be the exception, that your first business won’t fail. If you want that longshot to become more realistic, you need to read these tips and tricks for succeeding your first time around.
Equip Yourself With the Best Knowledge and Skill
The more you know about running a business, the less likely it is that you will forget or ignore a critical issue that will cause your business to fail. Few successful first-time entrepreneurs are kids just out of high school; it takes years to accumulate the right knowledge and skill to thrive as a business owner and leader. Plus, it takes pursuing the right kinds of experiences to ensure you are well-rounded enough to help your business thrive.
First, you should aim your education toward entrepreneurship. This means studying a complex business field, like finance, or even enrolling in a dedicated entrepreneurship program. You should also strongly consider enrolling in an advanced online MBA program, which enhances your business management abilities while you gain real-world experience.
Speaking of experience, after you graduate with your bachelor’s degree, you should immediately launch yourself into employment. Though employment isn’t where you see your career remaining for the long-term, it is essential that you spend time working in the industry where you hope to launch your business. This will introduce you to industry standards, industry tools and other tactics useful to your future startup. Further, it will provide you with helpful contacts in the industry, whom you might convince to join you in your new small business or who might otherwise provide advice, resources and support as you begin your entrepreneurial endeavor.
Finally, before you step into the deep end of entrepreneurship, you should have some real-world experience in management. You might think you know how to lead a team, but you can’t be certain until you do it. Management experience will help you hone your ability to build realistic budgets, plan strategically, motivate, increase performance and more. Then, when it is your small business on the line, you will have a better idea of what to do right.
Avoid the Bad Kind of Business Debt
Funding mistakes topple more new businesses than any other issue. Therefore, you should devote time and energy to getting your funding right. Specifically, you don’t want to accumulate the bad kind of business debt — which is undoubtedly credit card debt. As attractive and convenient as credit cards are, they don’t facilitate business growth; their short terms and high interest rates will tank your finances fast.
Instead, you should pursue a reputable small business loan, ideally from an institution like the Small Business Administration that is dedicated to helping small businesses thrive. You should also take out a business line of credit, which will help you make big purchases (or recover from slow sales periods) when you need to.
Of course, there are other initial funding methods, like angel investors and venture capitalists. You can dabble into these areas if you feel your startup is appropriately attractive to these funding providers. However, you should never try to bootstrap a business fully or rely heavily on friends and family for funding. Both of these methods mix your professional life and your personal life unhealthily, causing stress on what should be your support system.
Use Data to Enhance Your Decision-making
Finally, to set your small business out on the right foot, you should equip yourself with a wealth of pertinent data. Before you launch, you should have a business plan that includes thorough analysis of your market, to include information like existing and emerging competitors, audience demographics, price point data and more. Research like this will guide your business planning and decision-making, so you can make strong, informed choices early-on for your business.
Even so, your data collection efforts shouldn’t cease once your operation is up and running. You should continue to leverage data as your business grows to ensure you are making optimal selections regarding sales and marketing tactics, product range, pricing and more.
Success as a small business owner isn’t about flash and bang; it’s about careful diligence for years before and after your startup launches. Even then, business success is as much reliant on luck as anything else. As long as you remain committed to your business idea and improving your own skills and knowledge, you should be able to stave off failure.