Everyone starting a business hopes their business will succeed. But you need more than hope to start a successful business. According to the Small Business Association (SBA) 30% of new businesses fail during the first two years of being open, 50% fail during the first five years and 66% fail during the first 10. One of the biggest causes of failure is being “undercapitalized” that means you don’t have enough money to live on while the company is getting started. Another is a lack of proper planning. Here are some steps that can greatly increase your chances of success.
Develop a Business Plan
There are a variety of resources available online to help you develop your business plan but it is essential that you do this before moving ahead to other steps. The Small Business Administration is a government agency that can help you get started. They offer assistance from retired business professionals at no cost to you.
They also offer a guide called “10 steps to start your business“. The Guide includes information on how to:
- Conduct market research
- Write your business plan
- Fund your business
- Pick your business location
- Choose a business structure
- Choose your business name
- Register your business
- Get federal and state tax IDs
- Apply for licenses and permits
- Open a business bank account
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Be Extremely Frugal During the Early Years
In an effort to fight the problem of under capitalization you should budget and cut costs at every opportunity. Even companies that receive massive injections of capital from Venture Capitalists need to watch their pennies. Often growing too fast can strain a company and actually cause it to fail because processes and procedures have not had a chance to develop and so the company just throws money at the problem which then becomes a cash drain.
Take Advantage of Social Networking
Modern businesses are the ones that do the best nowadays. They’re the businesses that understand the digital world in vivid detail. If you want people to depend on your business time and time again, you need to have an A+ social media presence. People trust businesses that are communicative and responsive. They appreciate businesses that take the time to keep up with advancements and developments, too.
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