Thousands of people strive to become successful at opening and operating their own small businesses each year. However, according to the Small Business Administration, over 50% of small businesses fail within their first year. Regardless of the type of operation that you will be opening, there are several small business tips that should be followed in order to build a solid foundation for success and longevity within your respective industry.
Develop a Detailed Business Plan
One of the biggest mistakes owners make when opening their business is doing so without a detailed business plan. Studies show that small businesses with a business plan are more successful and grow faster than businesses that don’t.
In fact, a recent study of over 2800 different businesses proves the importance of having a business plan. According to the University of Oregon, companies with a well-developed business plan in place before they opened their business were more likely to secure a loan. They are also more likely to receive investment capital and see better businesses growth. So regardless of whether you just want to have a sole proprietorship in your home state or even incorporate a business, a detailed business plan should be developed first and used as a blueprint for your company’s operations.
Network with Other Companies
Many small businesses also fail to succeed because they don’t have a strong network in place as a support system. But working closely with other companies and businesses can help. Especially those that correspond well what you offer to your customers. Assisting companies with similar goals increases your chance of experiencing exponential growth and success. In fact, 70% of successful small businesses credited professional networking as one of the main reasons for their company’s success. This is according to a study conducted by the Kauffman Foundation.
Manage Company Finances Effectively
According to Entrepreneur Magazine, 80% of US companies depend on financing in order to grow their business. However, an even higher percentage of businesses depend on financing just to establish their businesses and get them running. When exploring different finance options, make sure that you take into serious consideration the long-term conditions and consequences associated with those options.
For instance, many entrepreneurs decide to use some of their 401k funds to finance their businesses only to eventually end up having to pay penalty fees for defaulting on their loans after they fail to make enough money from their business to ensure timely payments. Whether you are taking out loans or factoring your invoices, know what the financial implications are. Just ensure that, before committing to any financial agreement, you take time to verify that’s the best course of action.
Following these tips will allow you to separate your small business from the many others that fail within the first year and set the pace to enjoy long-term success in your industry.
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