How to Prevent Business Failure and Be Successful
At least a third of startup enterprises don’t make it to their second anniversary. That’s according to a study by the United States Small Business administration. The same study intimates that 56 percent of startups will collapse before their fifth year in the industry.
So, as an entrepreneur, what measures should you take to ensure your business succeeds? Well, regardless of the pressing economic conditions, you can take precautionary measures that guarantee the success of your enterprise. You may engage a Business Plan Service expert to help you design a plan that’ll guide you to success. These are some pointers to consider.
1. Make Accurate Projections
An entrepreneur should be optimistic in nature. However, this shouldn’t blind you from the realities of the market and its prevailing conditions. Being overoptimistic may lead you to overestimate the potential revenues and underestimate the costs your likely to incur.
These unrealistic projections will influence you to make poor decisions emanating from inaccurate data. As an entrepreneur, you may choose to hire a competent Business Plan Service to validate your idea. They will check its viability in the given market and also guide on the costs and revenue projections.
2. Manage your Cash flow
All startup businesses struggle with financial cash flows. The investment cost and other purchase you make when starting out will always outweigh your sales proceeds. A study done by Wharton School of Business intimates that 14 percent of businesses closes shop due to uncontrolled costs. The resultant effect is a negative cash flow.
When a business experiences long periods of negative cash flows its effects are similar to that of a person experiencing excessive blood loss; lethargy, incapacitation, and death.
A fragile startup business should design ways to increase revenue and limit its costs and expenses. The only way to do this is by drafting a clear and concrete business policy.
3. Avoid Excess Debts
When starting an enterprise, it’s quite impossible to rely on your own savings as capital. Debt financing also forms an important component of your component. However, it also poses a greater risk to the survival and success of your business.
Trouble starts when it’s time to service and repay the debts. If they’re too many, your sales proceeds will be used to service and repay the loans. In this way, it’ll limit the flexibility and growth of your company. Instead of using the proceeds to hire new employees and expand the customer base, you’ll be servicing these loans.
A competent Business Plan Service expert will help you manage your finances. They will advise on the best financing strategy that incorporates your personal savings and debt financing without limiting the flexibility of your business.
4. Keep in Touch With Your Customers
Your business will collapse if you neglect your customers and their respective feedback. Your customers may like the services or products you offer but, perhaps would love it if you alter a given feature. So, take your time and analyze your market.
What are they saying? Do they still have an interest in what you’re offering? These are some essential questions that your business plan should answer. Maybe the product you’re offering is no longer in demand.
If you want your business to be successful, survey the market. Understand the trending values and interests of your customers. If your business can’t meet them, there’ ll be disconnect that’ll make your business fail.
Conclusion
Starting and running a successful business requires determination. You must be willing to get everything right from the start. The ability to do this depends on the business plan that you draft.
A good business plan needs to be actionable. It should state what sets you apart from your competitors. A good plan is the main determinant of the success and survival of your business.
