Aspiring entrepreneurs are fairly excited when they make the decision to open a small business. Sharing this news with friends and family usually generates a response referring to numbers or percentages. Something like, “about 60 percent of all businesses fail within the first two years.”
Although this statistic is rather accurate, it does little to prevent enthusiastic self-starters from dreaming of running their own enterprise. According to the Internal Revenue Service, the number of small businesses in 1997 increased rapidly as shown by the 23 million business tax returns. In 2000, with the unemployment numbers at a low, small businesses in America created all of the new jobs, as reported by the Census Bureau. The bottom line? Regardless of the sustaining and consistent failure rate for start-ups, opening a small business is certainly a viable option for individuals ready to roll up those sleeves and get into some good old-fashioned hard work.
SAME GAME – DIFFERENT PLAYERS
Years ago, let’s say a decade or more, new business owners had fewer resources and less technology than entrepreneurs today. Improved technology, new products and countless resources make opening a small business less complicated and more economically feasible.
An entrepreneur with limited start-up capital can literally test run a business idea on millions of potential consumers without ever opening the doors of a store front, thereby saving thousands of dollars. This is the beauty of living in a virtual, interactive and technically advanced society.
Rule #1: Get connected.
An entrepreneur’s market research buddy is the World Wide Web. Being connected is imperative before starting a small business. Large corporations, small mom and pop operations and even local bakeries are quickly learning that the internet is an invaluable resource for growing business, communicating with customers and keeping an eye on the market. A company that has been in business for some time could possibly get away with not being online, however, as a new business it is almost mandatory to the success of the operation to be connected.
Rule #2: Create an online presence.
Be ready to communicate online. Create an email account. There are dozens of internet service providers who offer free email accounts. Before beginning serious research or telling others about the new business, get an email address. It is the fastest, and often preferred, method of communicating in writing.
Rule #3: Get mobile.
Today’s consumer is savvy and technologically advanced; they expect the same of small businesses. Mobile and cellular telephones have unlimited capabilities, which makes taking business on the road a normal part of daily operations for small business owners.
BACK TO BASICS
Once the latest features necessary for today’s aspiring entrepreneur are covered, opening a small business requires the basic elements it has always required. The basics haven’t changed: research, marketing, location and financing are still necessary to the success of operating a small business. In addition to these age-old necessities, having knowledge in the chosen industry and skills will definitely smooth the start-up transition.
Rule #4: Thoroughly research your idea and location.
Once upon a time the first advice for opening a small business was ‘write a business plan’. Today, unless individuals are seeking capital from formal sources (such as banks or venture capitalists); a simple business plan will work to get started. This type of business plan looks like an outline, which includes much of the research gathered during the planning stages. Included in the outline should be calculations, location details and the exact plans to operate, market and attract customers.
Rule #5: Start with enough capital.
Capital, or lack of it, is the number one reason new businesses fail within the first few years. Far too many entrepreneurs underestimate the expenses they will incur during the formative stages of operating a small business. Outlining a financial plan as part of the simple business outline will dictate the initial funding needs. Overlooking a financial plan is a sure fire way to increase the chances of failure. Some rules are meant to be broken – this isn’t one of them!
Rule #6: Expand skills and knowledge in the business and/or industry.
“To thine own self be true.” This means, no one knows what you do or don’t know better than you. So, if you don’t know it, be willing to learn or hire someone more informed. If you can’t figure it out, be willing to ask for assistance. If you are unsure, there are countless resources from the local library, Small Business Administration, Chamber of Commerce, Federal Government and others.
Myriads of resources have been prepared with the goal of decreasing the failure rate of small businesses. So far, they are working minimally. The failure rate remains the same. Why? Perhaps entrepreneurs are not utilizing every resource or are unaware of all of the available resources. Whatever the reason, the chances for success increase when every resource is employed.
