According to Inc.com, the United States has 27 million entrepreneurs. Some of these will succeed while a majority will fail. The actual number of small businesses that do not thrive is a matter of debate since most transition into a new form. Though there is no formula for entrepreneurial success, there are some things that can stack the decks in your favor.
The number one reason that a new small business fails is because it is undercapitalized. Generally, entrepreneurial companies have very little staff, being solely staffed by the owner. Some may be able to maintain a worker or two. Paying yourself and an employee is a huge overhead and you will need enough money to keep this going, plus have three months of operational expenses saved in the bank. Some people are able to do this by keeping a day job and working their business at night. Others have an angel investor or take a loan against existing equity. No matter how you do it, you need to factor these expenses, labor hours and repayments into your budget and financial plans.
Your business cannot flourish if you keep it in a small bubble. You need people that love and support you. These individuals will become your inner marketing circle, creating the basis for most of your marketing. Social media has made it easier for a small business to gain a foothold on a small budget. You will want to use it to disseminate information, make your business a thought leader and educational resource, and recruit minds to your cause. If you have an extensive personal network then much of this can be accomplished without your business spending a cent. Use your friends and family to expand your social network.
A Practice Run
In any business, there is an amount of on-the-job training. Unfortunately, if you are the owner and sole employee, this training is hard won, costing you money and sales when you make mistakes. To take some of the pressure off, create a safe business to use as practice. An established direct sales organization like Amway can let you get your feet wet. If you lose a sale or two from lack of experience then there will be no dramatic hit to your business but you will gain very valuable skill. Bring these new skills into your own business and use them to create your empire.
A Business Plan
You may never look at it again but the process of business planning will make it so that you are not walking in the dark. The parts of a business plan include the mission and vision, the day-to-day operations, and your financial projections. Also, most investors and lenders will require a business plan before they give you any money. Take a look at the Small Business Administration for resources on developing a business plan.
The Right Attitude
Entrepreneurs are a unique breed. They are risk takers. It is one of the reasons that it is so hard to spiral in on failure statistics. Following Edison’s idea that there is no such thing as failure, only a thousand ways not to make a lightbulb, the entrepreneur never quits. Their daring attitude makes them change the way they do business, transforming one idea into another. Do a self-assessment and make sure that you have the right attitude to be an entrepreneur.