In the US alone, more than five hundred thousand new small businesses start up every month. Sadly, the prospects for many of them are not rosy. A staggering 80% of them will fail within the first couple of years. On the flip side, such depressing figures do provide an opportunity to learn from their mistakes. Many businesses fail because they have simply run out of money. However, this is not always the main reason. To help you avoid becoming another of the statistics, here are some tips you’ll want to follow. It doesn’t matter how enthusiastic you are about your new venture, setting out without a plan is going to make the road ahead very difficult.
Essential Points to Include in Your Business Plan
Having a business plan will allow you to experiment before putting it into practice. There are a few essential points this plan must contain:
- Profit – figure out how you’re going to make a profit. This is, after all, the goal. You need to work out how much you need to sell to cover your costs. Anything extra will be profit. This is called a break-even analysis.
- Start-up capital – starting up a business using finance will be a burden for your business. It’s better to use as much of your own money as possible.
- Insurance – include insurance as one of your costs. You will need it to protect yourself should the money run out.
- Profit-loss forecast – this is a prediction of your profit and losses over the year.
- Cash-flow analysis – this shows how much cash you predict will be coming in and going out of your business.
Don’t be Afraid to Ask for Help
Starting up your own business can be very daunting, especially if you have little financial experience. Creating some of the features of a business plan require a certain amount of expertise. Apps are available, or you may have friends or family you can go to for help. Professional business advisors can also be a valuable source of information. One such firm is Lawbiz, a company that can offer advice if you want to start your own law firm.
Know Your Customer
One of the most important keys to success is to know your customer and what they want. You might think you’ve got a brilliant idea, but will any customers agree? Before you set up your business do some research. Talk to prospective customers and don’t forget about looking at the competition. You may think your product is unique, but there are very few unexplored niches in the modern business world.
If you follow the tips above, you are on the right road to making your new business a success. There are no guarantees, but it will make the start-up process a little less stressful. Remember, you’re never on your own and there is a wealth of useful information available on and offline. There are professional organizations and experts you can go to for help. A fee may be required, but it will be worth the expense.