World Executives Digest money | As much as half of all small businesses fail within their first year. This isn’t for the lack of ideas or for the lack of hard work. It’s usually structural issues regarding the setup of the business itself that cause its downfall.
This can be prevented by taking the time to plan out your business strategy and not going into an industry until you have the products, services and employees that can keep your company profitable. Even when you’ve done all that, there are always unforeseen problems that you can’t prepare for, but you need to factor them into your plans.
Know your industry
Before you can even start setting up a company, you’ll need to make an effort to learn about the industry you plan to get into. It can partly be done via public knowledge and information you can get online, and by joining the proper industry organization.
On the other hand, there are parts of the industry that you can learn about only by being part of it. This usually includes how employees are paid and how companies are structured. Any information you can get in this regards is essential, but also much harder to come by.
Small companies are usually set up by a small group of people with an idea and possibly some assets to jump-start the business. It’s therefore often difficult to start hiring outside this small circle. It’s best to start with the professionals whose expertise you can’t mimic.
For a small business, that should probably be a tax accountant since their work could end up saving you quite a lot of money in the long run, and they free you up to work on the big-picture tax instead of handling the mundane bookkeeping process.
Regardless of how well you plan things out, there will always be unexpected expenses that can cause serious problems with your day-to-day tasks. It’s imperative that you have a plan for handling these expenses without jeopardizing your savings and day-to-day business operations.
One of the ways to do so is to rely on payday loans which you can repay quickly. These loans are an easier option than going through the process of getting approved for a loan with your bank and worrying about your credit rating.
Businesses are often reluctant about joining industry organizations, because that seems like an unnecessary expense for a small enterprise to take on. However, there are numerous benefits of doing so, and that’s one of the first things you’ll need to do once you establish the company.
It’s these connections that will help you get new business opportunities and find potential business partners. If this requires you to attend industry conferences and take a few business trips early on, it’s something you’ll have to do. It’s not an investment that pays off right away, but in the long run, it can create numerous business opportunities you wouldn’t otherwise get.
A company needs to start advertising its products from day one. These days it may seem like all marketing efforts can be done online and you can rely on social media as your main source of customers. However, this isn’t really the case – traditional marketing channels are still important and aren’t something to neglect.
At least a portion of that effort should go towards remarketing. New companies lose customers rather easily, but as much as half of them could be brought back with a good remarketing campaign. It’s a campaign that doesn’t require that much investing; you could accomplish a lot with a carefully worded email and a good offer.
A small business will succeed or fail based on how carefully its owner has managed its setup. It’s important to keep your finances prepared to handle unexpected expenses that often hurt small companies.