Things You Need To Remember Before Starting a Small Business
Everyone knows someone who has decided to go into small business but did you know that 70% of all small businesses fail within the first 12 months of operation. In some countries the failure rate is as high as 85 to 90%. Small Business is one of the toughest industries you can ever decide to take on and most people who go into small business go into it for the wrong reason.
I have started 4 small businesses over the last 10 years and every single one of them has been started from scratch and survived into a thriving business. Just recently I have decided to sell one of the businesses off cause it had done what I expected it to do which is the first issue you need to think about.
Issue 1. Have a Clear Understanding of What You Want To Achieve In Your Business
The majority of people, who actually go into business, go into it for the wrong reasons. Even I have been guilty of that. So what is the wrong reason? Most people start a new business because they believe they can do a better job than their current boss. Maybe this is true, maybe it is not but what most people really want is better working conditions and better pay. No one can blame you for wanting that.
If that is all you want, then I strongly suggest start a new business
One of the key issues you must remember before evening thinking about starting a small business is this. Do you know what your business will look like? If you were walking down the street, how would you want to be found? What impression do you want to give to your clients? What clearly do you want to achieve in this business?
The second clear understanding you must have of your business is, when will you know when it is finished? When you have built what you want to achieve and more importantly, how will you get out?
See most people when they go into business have no exit strategy and that is one of the worst things you can do. Before you ever start a business, the first thing you must work out is how you are going to get out of the business.
Two years ago, I started a small car cleaning business. My wife and I both started it because she wanted to see if she could build a business. Our exit strategy was to sell the business once it was done. How we would sell it was something we were not sure of?
See we could have taken a number of approaches to this. Our exit strategy could have been to franchise the business, sell it to a single owner or to float it on the stock market. We chose that we only wanted to sell it to another owner, but we still built the business in such a way that there was still plenty of growth and opportunity in the business for the new owner, but we had removed the risk for them on how to run the business by clearly documenting everything they needed to do to run that business.
Before ever starting a business, always think about how you will exit the business, when you have achieved your objective for that business. If you do not have an exit strategy in mind, then you will never get out of the business.
Issue 2. Keep a Strict Schedule
Small business is consuming. Unlike in large corporations where you can hire many people to do a range of tasks, small business requires the small business owner to do many of the tasks themselves. Some of the tasks include doing your books, lodging trademarks, doing the ordering etc. Often when you start in a small business, you can not afford to hire people to do these tasks.
What I have personally found is that if you do not keep a tight schedule and document your meetings and tasks you have to do then it will not take very long before you will be swamped by all the things you have to do in the business every day. It is this phenomenon that often leads small business owners to quit and fail in the first twelve months. Let me tell you this, the warning signs that this is starting is when you say to your wife on a Saturday or Sunday afternoon that you are going down to the office to catch up on paperwork for a few hours. Once you get into this habit, you will never stop doing it and the business will consume you really quickly.
I strongly recommend all small business owners keep a diary. My preference is to use Microsoft Outlook, simply because it includes a calendar and you can make sure that each day you schedule your work plus your appointments to make sure you do not forget anything. If you do this, then you will find over time you can get through this plus you will learn how long it should take to do the various jobs that make up your business and whether it is worthwhile in getting someone to actually do those tasks for you.