During these tough economic times, many individuals who have lost their jobs are turning towards entrepreneurship.
Undoubtedly, starting a business is a big step however once your business is up and running you are much safer than many of your friends who are employed at "real jobs.
" Often people have asked for ideas or advice when starting on these ventures so I have compiled a list:
Undoubtedly, starting a business is a big step however once your business is up and running you are much safer than many of your friends who are employed at "real jobs.
" Often people have asked for ideas or advice when starting on these ventures so I have compiled a list:
- Do your research and learn all you can: There are many resources for new entrepreneurs.
Some of my suggestions are "Innovation and Entrepreneurship" by Peter Drucker and "New Venture Experience" by Karl Vesper.
They both offer great ideas for searching out new business opportunities and offer a wealth of knowledge and wisdom about entrepreneurship. - Build a winning business plan: Formulating and writing a business plan is essential to ensure you capture all the big issues about starting your business as well as learning about the industry.
You will refer back to your business plan to compare your pro forma numbers to actual and keep you on track of meeting your business goals. - Invest in an accounting system: A good accounting system is essential in order to succeed in business.
You need to easily be able to identify when you are doing something good for your business and when something is hurting your business.
You need a good, fast, easy way to measure your profits.
Many businesses today use QuickBooks.
It is affordable and easy to use. - Minimize the startup costs: Try to keep startup costs as low as possible.
Stretch your startup dollars as far as they'll go.
Many times reducing the startup costs required to start the business reduces the risks of failing. - Grow slowly: The truth that many people do not realize until it's too late is that you can grow a business too quickly.
And if you grow a business too quickly and you maintain the fast growth, you can kill the business.
To grow a business' sales by a certain percentage each year, you also need to grow its assets, liabilities, and the owners' equity by the same percentage.
Yet that may be impossible.
Therefore, you must understand and know what your sustainable growth rate is.
Then manage the business so that you don't grow faster than your sustainable rate. - And last but certainly not least...
stay upbeat! The first five years of a new business are critical and once you have passed the 5 year mark, your mature small business is statistically safer than working in a job.
However it is critical that you do your homework and research first and carefully analyze the data available as discussed above.
Entrepreneurs who do their research and take the above steps into considerations on average have a 60-80% chance of succeeding through the first five years.
Once you are considered a mature small business; statistically mature businesses fail at the rate of approximately 1% per year.