Every year lots of people make the decision to set up in business. Only a small proportion thrive and survive. So what steps can you take to increase the likelihood of success?
Every year lots of people make the decision to set up in business. There are various reasons for this including:
More flexibility
More control of their working life
There is something that they are passionate about which they believe they can make money from
While lots of people set up in business, lots of businesses fail. According to Michael Gerber's The E-Myth Revisited, 1 million businesses are set up in the US each year:
40% fail in the first year
80% fail within five years
Of the remaining 20%, 80% fail in the next 5 years
Put simply, only 4% are still around by year 10.
Other studies suggest that the failure rate in the first 2 years is around 50%.
So what steps can you take to increase the likelihood of success?
Be clear about what you want to do
Get clear about the level of commitment you are willing to make
Research the market for the area of business in which you wish to operate
Have a very clear vision for the business that is easy to convey
Set some very specific and measurable goals
Be clear about how you are going to generate business making sure that it is appropriate for your market
Have a very clear financial plan with a big focus on your cash flow
Keep your set up costs as low as possible. Really question what is absolutely necessary to get started
Prepare a risk management (or contingency plan) in case things don't proceed as you expect
Build in some form of accountability structure to keep you focussed. It could be a business buddy, business coach, business mentor or business start up group. Initially it can be a real struggle and it is all too easy to give up
Give proper attention to areas like accounting, tax, insurance, business rates, health and safety, data protection, etc. While these might not be the areas that really excite you they do need attention
If you are lacking skills or knowledge get yourself on a course. Your local Business Link or Chamber of Commerce are good starting points for finding events.
A few final thoughts to remember:
It takes time to get established
You need to stay committed even when the going gets tough
