Nine Factors in the success of a new business

New small business is started every 11-seconds! Why so many?

The word is out... starting and operating your own business can be the road to financial independence. Furthermore, it can give you the opportunity to "work" at something you love. Pretty inviting, don't you think?

But .... The majority of these new businesses fail within the first year or two of operation. This is unfortunate since, with a little knowledge, your business can be a long-term success. In the course of my consulting and small-business seminars, I have listened to hundreds of success and failure stories. It soon became clear that the successes were based on some very common elements ...nine to be exact ... and that's what we'll discuss in this article.

It will have served its purpose if you use just one piece of information to your personal advantage. One advantage of being in this business is that I am exposed to such fine material and some of the most successful business thinkers of our day.

One such individual is Robert Sullivan. He is the author of "The Small Business Start-Up Guide," which expands greatly on these nine steps and contains a wide variety of information guaranteed to help you succeed. Here are Sullivan's Nine Steps. I imagine as you read them you will be saying to yourself, "why of course, that's obvious!"

Just remember, it's these "obvious" items that cause many, many businesses to fail.

1. GET SMART

2. GET ADVICE

3. PLAN

4. PROTECT YOURSELF

5. AVOID HIRING EMPLOYEES

6. PURCHASE A COMPUTER

7. PERSIST

8. VISUALIZE SUCCESS

9. DON'T DELAY

 

1. GET SMART

You might know a lot about your product or the service you perform. But even if you're an expert, you might not be knowledgeable about the practical aspects of starting and operating a business. A good product or service is NOT enough to make you successful. Be honest with yourself when assessing your knowledge of business. If you lack expertise in certain areas, seek out additional information.

Here are some specific suggestions:

When did you last visit your local library? Do it now and spend a couple of hours browsing in the business and reference sections. Most libraries keep books about small business in the public reference section. I guarantee that your visit will net you at least a dozen good ideas that you could put to almost immediate use.

The Small Business Administration maintains a website on the Internet at http://www.sbaonline.sba.gov/. If the sentence you just read doesn't make any sense to you, pay special attention to step #6 below. and ... consider purchasing a copy of Robert Sullivan's book, "The Small Business Start-Up Guide." His Email is: bobs@isquare.com

2. GET ADVICE

You cannot be an expert on everything. Get assistance from as many sources as possible. Use your attorney, your banker, and your accountant or CPA. Talk to family, friends, and your competition. Yes, I said "your competition."

Most small business owners in the same or similar business are more than happy to share experiences. You both have a common bond ... you're entrepreneurs! It's important to get advice early enough to keep you out of trouble. It's also important that you find good, qualified professionals. The best way to find these folks is to ask for referrals from other small business owners. Believe me, most owners will be very free with this kind of advice. You want your accountant, attorney, and other professionals to be "small business friendly." That is, you need to be convinced they will understand your problems so they can give the best advice possible.

3. PLAN There are many reasons why businesses fail but the major reason is lack of planning. Put simply: FAIL TO PLAN & YOU PLAN TO FAIL.

What you need is a strategic plan ... your plan for success. It should define your business mission, your present situation, and where you want to be in the next three to five years. It must be honest! This plan, if well thought out, will become your roadmap in making smart business decisions. It will allow you to anticipate problems and be ready to deal with them. "The Small Business Start-Up Guide" includes a chapter that will help you develop a strategic plan that will become one of your most important tools for success.

4. PROTECT YOURSELF

Take NO chances. Before you start your business operations, make certain you are protected from both a legal and insurance point of view. Starting and operating a business means you must be fully aware of the potential liabilities that may result from any number of situations.

Are you ready for the following....? Your partner sues you ... Your product causes an injury to a user ... A customer slips and gets hurt inside your store ... A trucker backs into your loading dock and damages the building ... Your sprinkler system inadvertently operates ... A fire destroys your office ... A major customer fails to pay ... One of your employees sues you for discrimination ... A key supplier goes out of business and you can't deliver your product ... You are forced into bankruptcy ...

This list could go on for pages but the point should be obvious. You must be ready for these and similar contingencies. For example, dealing with these kinds of risks requires that you: Have selected the best business legal structure (partnership, corporation, Limited Liability, etc) Fully understand the potential consequences of personal guarantees. Understand and use credit bureaus Have a comprehensive insurance package in place

These are only a few items you must think about. Protecting your personal assets is a vital part of your business planning. "The Small Business Start-Up Guide" contains specific guidelines for this planning including structuring an effective insurance program.

5. AVOID HIRING EMPLOYEES

This is not always possible, of course, but put it off as long as you can. The legal complexities of hiring and maintaining employees can be daunting and take up a lot of your valuable time. Hiring your first employee is a BIG step and you must be fully aware of what is involved. For example, did you know that ... The "real" cost of an employee is about 2-1/2 times his or her actual wage?

You can get sued for merely asking the wrong question during an interview? Checking references is an art form? You MUST ask the right questions. You will need an employee policy manual that covers everything from working hours to substance abuse policy? You must maintain worker's compensation insurance? You must comply with Occupational Safety and Health Administration requirements? You must comply with the Government Fair Labor Standards?

The point here is that you must be aware of these and other requirements to avoid future problems. Not knowing will not be an excuse. Think carefully before you place an advertisement for that first employee. "The Small Business Start-Up Guide" discusses the elements of employee policies, employer responsibilities, working with employees, and alternatives to hiring employees.

6. PURCHASE A COMPUTER

Operating your business without a computer will put you at an immediate disadvantage. They are simply too valuable as a time-saving tool. Do not be overwhelmed at the apparent complexity of the computer ... they are really quite easy to learn to use and once you have begun, believe me, you'll wonder why you waited. Furthermore, you will want to take advantage of the Internet ... an exciting world-wide communications and information tool. By using the Internet you will be able to communicate anywhere in the world via email (electronic mail) with no long-distance charges!

You will be able to view and save information on virtually every subject imaginable. Furthermore, you can, with little expense, place your own business related information on the Internet allowing millions of users to learn details about your product or services. Quite a way to advertise and sell, don't you think?

7. PERSIST

Hang in there! There will be good times and bad. It is difficult to find a successful entrepreneur who does not have a story to tell about their failures. View a failure as an opportunity and learning experience.

8. VISUALIZE SUCCESS

Keep your goals in mind and expect you will achieve them. Any failure is merely a temporary setback and provides an opportunity for additional successes...and finally...

9. DON'T DELAY

How many times have you said, when looking over some new product or service, "Wow, I thought about that last (month)(year)." The lesson is clear, if you believe you have a really good idea, pursue it until you are convinced otherwise. A great idea is worthless if you don't do something with it!

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article by Gerry Robert. He can be reached on www.salesmall.com

article compliments of Trevor Roberts - robert@easy.net.ph, reprinted by permission


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