Every year, millions of people respond “Yes” to this question, and each year, this response costs many of them money, time, confidence, and heartache. The Small Business Administration estimates that 580,900 new small businesses are established each year, excluding the daily emergence of small one-person enterprises. However, even if you are the only employee in your business, there is still something to be learned from the SBA’s statistics.
Two-thirds of new businesses survive at least two years, and 44% survive at least four years, according to the SBA. The owner’s level of education and motivation for launching the business are two of the most important determinants of the business’s survival and growth.
How can you ensure that you are among the winners in this high-stakes game as opposed to the losers? The answer lies within you.
You must answer four essential questions to determine whether your own small business will survive and prosper.
1. Are You Prepared?
Have you mentally prepared for the transition from employee (or student, or whatever label currently applies) to manager? You are now responsible for making decisions regarding everything from office supplies to product lines. This total control is one of the motivating factors for many individuals to start their own business, but it is also one of the factors that drives new entrepreneurs insane. There is an endless list of decisions that must be made at the outset, and new questions arise every day.
Even more importantly, you must remember that you will wear many hats in a small business. Even if you are able to start your business with one or more employees, each of you will have multiple responsibilities. And if you are a one-person operation, you serve in all capacities, from file clerk to maintenance crew to salesperson to CEO. Can you handle switching between tasks and roles in such a manner? Are you prepared to make these modifications?
Have you also prepared your family and friends for this shift in perspective? This change can have positive or negative effects on your family and social relationships. If your friends and family are supportive going into the process, it will be much simpler.
2. Where Is Your Market Niche?
Have you determined your market niche? One of the primary causes of business failure is the failure to focus on a specific audience. Yes, if you are a major discount chain, you can sell everything from peanuts to wallpaper, but a small business simply does not have the resources to conduct such a business. Nonetheless, small businesses dominate the market (generating more than fifty percent of the private gross domestic product last year) by adopting an alternative strategy — a niche.
Knowing your niche enables you to more effectively find, target, and retain customers, as well as provide the highest quality products and services to that customer base. This concentration is one of your best opportunities to not only survive in a highly competitive market, but to thrive.
3. What is your action plan?
The extent to which you plan before you open your business’s virtual or physical doors is also essential to its survival and long-term success. You must decide whether your business will be internet-based or incorporate more conventional models. Will you work full-time or part-time at your new enterprise? Are you going to hire assistance or work alone? Have you created a business plan (or at least an outline)? Dreaming, contemplating, and preparing can save you a great deal of trouble and time when problems arise. Planning can also help you maintain focus and keep your spending and time in balance.
4. Who Are You planning to call?
No matter how experienced you are in business, you will eventually need assistance. You will require assistance, guidance, instruments, or knowledge — or all of the above. One of the most beautiful and terrifying aspects of growth is that it can take you to unexpected places. Regardless of the planning and experience you bring to your new CEO position, the unexpected will occur. How will you handle this situation? It is crucial to understand that no business is an island. Helping is not a sign of weakness. Failure is when your business fails because you did not receive the necessary assistance.
The best way to receive timely assistance is to work on your support system concurrently with business development. Thus, you will already have a list of available resources that you can quickly utilize when emergencies occur. Regardless of your business model, you have access to an abundance of fantastic resources in today’s world. These consist of:
Published Works (newsletters, magazines, books)
The populace (professional advisors, mentors, teachers, consultants)
Networking (organizations and forums in your niche as well as general business and marketing)
Instruction and instruction (tutorials, courses, and seminars)
After answering these four key questions, you are ready to ask yourself the ultimate question: are you prepared to launch your own business?