How To Reduce The Risk Of New Startup Failure
Not every business is destined for failure, despite the depressing picture that some statistics show.
21.5% of new businesses fail to make it into a second year, which is a sobering thought. However, flipping those stats around, 78.5% of new businesses do survive, and that should be a reason for celebration.
If you're a new business owner, or if you are thinking about setting yourself up in business, you shouldn't be downcast because of the gloomy picture that some present. Instead, you should take steps to ensure your business has the chance to remain open in the long term.
Here are some of the steps you should take.
#1: Find your niche
At the planning stage, this should be your priority. Instead of opening a business that is far too similar to others in your area, you should plan for something different. Ask yourself: What gaps are missing in the marketplace? If you can fill those gaps with your business, you won't have to worry about a lot of competition.
#2: Consider a franchise
You don't always need to start a business from scratch. By opting for a franchise instead, you can start with something that has already been established. A franchise already has a brand name attached, and customers will know what to expect from the business. If you choose to buy a successful franchise, the chances of failure will be reduced. Visit Franchise Direct to find opportunities near you.
#3: Don't run into a large amount of debt at the beginning
A lack of money is one of the largest causes of business failure, so you do need to guard your finances carefully. You can make your life a lot easier at the beginning by starting your business on firm financial footing. If you do take out a loan, look for something with the lowest interest rate, to ensure you have a better chance at making the repayments. However, you might want to sidestep a loan, as you won't need to start a business that is in debt at the beginning. Instead, look for other ways to fund your business, perhaps through crowdfunding or family lending. And follow the next piece of advice to help you cut costs during your first year.
#4: Use low-cost ways to market your business
You need to market your business, of course. You will be fast-tracking your way to the road marked failure if you make little effort to promote your product or service. However, you don't need to blow your budget, as you will put yourself in financial jeopardy if you do. Thankfully, you have the internet at your disposal, as you can use digital marketing methods to promote your business cheaply. Market your business using social media, get your business listed on local classified sites, and follow this SEO beginner's guide to make sure your website can be found on Google.
#5: Create a support network
Do you know other people in business? If so, get in touch with them. Ask them for help where you need it, and benefit from the advice they can give you. And if you don't know anybody, get along to local business meetings and training events, and connect with the people who will be able to support you on your business journey.
Business failure is not an inevitability, so follow our suggestions. You can succeed in business, so think positively, and take the steps needs to ensure success.