Starting a business is a dream that many Americans share. In fact, for many, owning and operating a business is the American dream come to fruition. However, thousands of small businesses fail within their first year almost every year. This is often because the owners simply weren’t ready or didn’t understand what would be involved in running a business. The following are ten things that you need to know before you start a new business:
- Sell something you believe in – Don’t just sell a product or service that you think can make money. You need to believe in what you sell. It’s going to become draining to run a business that you don’t enjoy or believe in.
- Have good credit – The stronger your personal credit history is, the more likely it is that you’ll be able to qualify for a small business loan with better terms, such as lower interest rates.
- Offer something that meets a need – A product or service that doesn’t meet the needs of your customers is going to end up being a failure. One of the biggest mistakes small business owners make is to focus on selling a product that may do really well in a different part of the country, but won’t do well where they are located. For example, opening a bait and tackle shop in the middle of the desert is not a great idea.
- Have a unique selling proposition – Even if you offer a product or service that meets a need, you need to be able to differentiate yourself from existing products and services offered by competitors. What makes what you have to offer unique? If you don’t know, neither will your customers – and they’ll go elsewhere.
- Have a business model – One of the reasons many small business owners fail is because they have an idea and manage to get the money and then dive in head first without a business model. A business model is necessary if you want to be successful. It outlines your goals, identifies revenue sources, identifies your customer base and more.
- Know how to avoid or manage debt – If you’re not good at handling finances, you’re going to find that running a business will be a huge challenge. You need to know how to avoid or manage debt so that your company doesn’t fall into a big financial hole.
- Maintain a personal life – While opening a business requires a lot of work at first, it’s important that you don’t overwork. Make sure you have some time to enjoy your personal life or you’ll get burned out quickly, which will eventually affect your ability to run your business.
- Seek guidance – If you’re a first-time business owner, you’re going to be in unfamiliar waters. Speak with other business owners in your area to develop relationships in which you can seek guidance when you need it.
- Educate yourself – Read up on running small businesses. The more you educate yourself, the better your chances are of avoiding common small business pitfalls.
- Larn to get organized – The more organized you are, the more efficiently and effectively you’ll be able to run your business.
These are ten things that you should know about owning and operating a business before you decide to start one yourself. If you make the decision to start your own small business, then be sure to contact us at Valezar & Associates for professional small business tax planning, accounting and bookkeeping advice.