Do you own a business? Are you thinking of starting one someday? Whichever side of the aisle you are on, you should know that running or starting a business is not a stroll in the park.
It requires grit, determination, insight, and above all – access to the right information. In the U.S. alone, there are over 30 million small businesses (businesses with less than 500 employees) trying to eke out a living, and these businesses account for just over 90% of all workers in the country.
Sadly, according to data released by the SBA, 1 in 12 businesses fold up every year. From the lack of financing to poor recruitment, there is a catalog of reasons that account for this harrowing statistic. Starting a business without knowing where the minefields are would be similar to walking a tightrope.
Whether you are a business owner or you have a business idea in the works, take a moment and answer these three questions:
1. Do You Have Enough Financing?
Of course, you do not need to be in the league of ultra-rich like Bill Gates or Carlos Slim to start a business. That said, you need to have enough capital both to start and sustain the business.
A U.S. Banks study shows that 82% of business failures are a result of money problems.
So, whatever you do, make sure you have thought ahead and made adequate plans for cash flow stability.
2. Have You Done Due Diligence?
When starting your business, you can never ask enough questions. Many businesses hit a snag when they encounter challenges they never expected. To ensure your business lives for a long time, you have to conduct proper research.
Start with the needs of consumers: find out what their desires are and how they want them solved. Take a hard look at your competitors – their strengths and weakness – so you can carve out your unique selling proposition. Read about the businesses in your area of interest and talk to industry leaders and experts.
3. Can You Hire the Right People?
If your answer is no, then you shouldn’t start a business. The reason is simple: what differentiates a mediocre business from a high performing one is the caliber of people in their team.
So, prioritize your recruitment by having a clear recruitment plan. Start with people who are not just obsessed with money but are enamored with the vision of the business.
4. How Driven Are You?
Read this carefully: Two out of every three businesses will exist after two years, 50% of all business will make it to five years, and one out of every three businesses will see the ten-year mark.
That shows that the first few years in every business are absolutely critical. If your business makes it beyond those years, then you have a greater chance of survival.
5. What’s Your Plan for Expansion?
No business should remain at the same level for too long. In fact, your returns and the sustainability of your business are hinged on the growth of your business. That is why for every business, you should have mergers and integrations (M&A) on your mind.
Ask all the big business, M&A has brought great benefits to them; case in point, Facebook. However, M&A is a tricky space to navigate. That is why m&a integration planning can help ensure you tick all the right boxes.
Wrapping Up
Starting or running a company can be challenging – especially when you are up against other businesses in a fast-evolving business sphere. Although it is daunting, it is certainly not impossible.
With the right vision and team, your business can make mincemeat of the challenges it encounters. But before you start your business, ask yourself the right questions and make you’re your answers are solid.
