Starting a business is no walk in the park. In fact, the number of new businesses that fail exceed the number that succeeds. That’s why it’s more important than ever to create a unique product or service that helps you stand out from the rest. According to statistics, about seventy-eight percent of small business startups survive the first year and about half of all employer establishments survive at least five years.
You may have started your business for the wrong reasons. The right reasons for starting a business which leads to building a successful company include these:
You have a passion and love for what you’ll be doing, and strongly believe that your product or service would fulfill a real need in the marketplace.
You have the drive, determination, patience and a positive attitude. When others throw in the towel, you are more determined than ever.
Failures don’t defeat you. You learn from your mistakes, and use these lessons to succeed the next time around. They consider failures as a “learning process.”
Not Investigating the Market. Your desire to open the agency blinds you to the fact that we’re in a down housing market and the area where you want to work is already saturated with agencies, making it very difficult to break in. You have to find an opening or unmet need within a market and then fill it rather than try and force your product or service in. It’s a lot easier to satisfy a need rather than create one and convince people that they want to spend money on it.
Leadership Failure. You will struggle as a leader if you don’t have enough experience making management decisions, supervising a staff, or the vision to lead your organization. Perhaps your leadership team is not in agreement on how the business should be run. Do whatever you can to enhance your leadership skills and knowledge of the industry. Examine other business best practices and see which ones you can apply to your business. A successful manager is also a good leader who creates a work climate that encourages productivity. He or she has a skill at hiring competent people, training them and is able to delegate. A good leader is also skilled at strategic thinking, able to make a vision a reality, and able to confront change, make transitions, and envision new possibilities for the future.
Insufficient Capital. New business owners often don’t understand cash flow or underestimate how much money they will need for startup and they are forced to close before they have had a fair chance to succeed. They also may have an unrealistic expectation of incoming revenues from sales. Be realistic at the beginning, and start with enough money that will last you to the point where your business is up and running, and cash is actually flowing in. Use professional business accounting software to keep records of all financial transactions, including every expenditure and all revenues received, and use this information to generate profit and loss statements.