There can be something extremely rewarding about being an entrepreneur and running your own business. However, there can be a lot of headaches and responsibilities that go along with it. According to the Small Business Administration, roughly 50% of all businesses fail within the first year. This is precisely why it’s important to take note of the actions you can take to minimize this failure rate and to maximize your personal success.
Create a Business Plan
First and foremost, any new business owner should create a business plan before they do anything else. This will outline your entire plan for starting and running your business. This includes everything from how to raise capital to fund your operations, the number of employees needed, the prospective clients you want to reach and how you plan on reaching them. Having a carefully thought out plan will allow you to minimize unplanned expenses that can be detrimental to many small businesses.
Have the Right Infrastructure
Almost all businesses have endless amounts of data that they collect, organize, and distribute. This can lead to the need to costly hardware and software to support the operations and be successful. However, having a proper Enterprise Resources Planning system is vital for making the most of the information available to you. Specifically, Software as a Service (SAAS) is becoming increasingly popular and is a useful tool for a small business. Because running servers locally can be expensive and require additional staffing, most small businesses are turning to cloud-based software for their resource planning software and needs.
Know When to Outsource
Many small businesses owners are very cost conscious when it comes to running their company. While it’s excellent and necessary to pay attention to the bottom line you need to be aware of when it actually pays off to outsource or hire knowledgeable talent to handle certain functions. For example, tax and accounting functions are best left to the experts! If you don’t have the highest knowledge and integrity when it comes to these functions it can actually cost you more in the long run in the form of penalties and fees to the government and tax authorities.
Starting a business with adequate funding is important from the get go. It’s inevitable that every business will run into a cash crunch at some time or another. It’s important that you minimize just how often this happens and that you never run out of necessary capital. Make sure you work out affordable lines of credit with your local bank or credit union. Also, ensure that you have enough cash reserves saved up for any cyclical down times that you might experience as well.