Entrepreneurship is a word that we hear a lot and associate with successful stress free business owners. Few entrepreneurs, however, coast through life without stress. The reality is stark when taking off on a new business venture. Entrepreneurship is often referred to as a rollercoaster ride. You’ll face challenges, take risks, and struggle to break from the pack. Failure looms on the horizons for most businesses. Learning how to empower your small business and navigate these challenges might help situate you on the path to success.
Picking the Right Business
Ninety percent of new businesses fail. Most small businesses fail within the first few years because they’re not the right businesses to begin with. This may seem obvious to you, but most people overlook this fact: picking the right business can save you time, stress, and possibly debt.
According to Fortune, here are the top reasons startups fail.
As the statistics bear out, the #1 reason businesses fail is because there is no market need. Before starting your business venture, you must consider the goods or services you want to offer and weigh them against demands. Even if it’s hard to admit, just because you like something or are passionate about something doesn’t mean other people will be. Never base a possible business venture on your interests or desires. Instead, look around your town and research what people need and find a way to fulfill their needs.
“What you see is what you get” should be the motto for your company. You should never explicitly sell people the goods or services you want to provide. Instead, create a need, then fill it. If you market your business as providing help, relief, and so on, you can go a long way toward cultivating customers. Remember one very important thing: your customers aren’t buying a product—they’re buying you.
So if there’s one thing above others that you must always do is deliver what you’ve promised. If you can’t deliver, you should always offer a money-back guarantee. You never want to cheat or to make them feel used or exploited, you never want people to experience regret, and you never want them to publicly attack your business with accusations of cheating. You must always give them what they want—not what you want to deliver—and you must always, without exception, provide the goods or services they paid for. If you can’t, you must give them their money back.
The only way small businesses can succeed is by delivering quality goods or services. If you as a business owner can’t deliver quality, then you’re probably not going to earn a living. It’s as simple as that.
The best way to start setting yourself up for success is to identify a local need and try your best to fill it. It’s as simple as that. You can’t force someone to desire a good or a service. Instead, you must learn to understand what people desire.
Of course, you can’t expect customers to rush to your business on opening day. Few businesses succeed from day one. You must cultivate and grow your customer base. While there are no strict formulas to follow in this part of your endeavor, we can provide some essentials tips.
You must establish recognition. People won’t think to use your business if they don’t know it exists. The best way to educate people about you and your business is through advertising. But don’t expect even the slickest marketing campaign to do your business for you. It might persuade some people to visit your business, but only you and the goods or services you’re offering can clinch the deal.
If you’re writing a list on how to find customers, identifying them should be at the top. You must figure out what your ideal customer is and then learn how to target them through ads, and so on. If you don’t know who your target customers are, then you’ll try to appeal to everyone—and probably end up appealing to no one.
Joining forces with other businesses can help build and establish a customer base. By working with another business, you might gain access to their mailing lists—for either snail mail or email. This information might help you generate leads when attempting to establish relationships with potential customers.
Building a Reputation
It should be obvious but it’s worth articulating: the best way to build a good reputation is to offer people what they want or need in a timely, cheap, and inexpensive way. The best way to create a happy customer is to fulfill their desires, and make the process and transaction as satisfying as possible.
After you’ve completed a transaction, try to persuade customers to leave reviews online. People pay attention to reviews. 90% percent of people read reviews online before committing to a business and 84% of people trust online reviews, even from strangers.
If you conduct yourself in such a way as to inspire mostly negative reviews, it could doom your business. You must always behave as if every customer is going to write a review—and you must understand that reviews in this day and age can make or break a business. Now that we’re in the digital age, your ability as an entrepreneur to define your business is diminished. It’s largely in the hands of consumers.
Many small businesses start off with a whimper and not a bang. If customers don’t flock to your business, if you find yourself standing around, struggling to make ends meet, you must prevent yourself from feeling discouraged. Discouragement can lead to feelings of worthlessness and a lack of motivation. Experiencing these emotions can drain you, which could result in slacking off.
Even if your business does start out slow and you feel discouraged, you must stay motivated. Take to social media and try to drum up business by creating a dialogue with people online. Never explicitly promote your business. Instead, talk to people. Building relationships online could possibly translate to customers in the real world.
Another way to stay motivated is to consider your approach. Is there a reason why you’re not attracting customers? Use lulls to evaluate your situation. Never assume the fault lies with customers. Always assume that you’re doing something wrong. This may allow you to see things differently, or with a fresh set of eyes. You can only truly fail if you refuse to identify and learn from your mistakes.
Building a Team
Not knowing when to hire additional help can destroy a small business. If you’re not generating enough revenue to sustain your business, additional salaries could plunge you into debt. Understanding the basics of supply and demand, and how to anticipate an uptick or a decrease in demand, could help you learn when to hire someone.
Before going on a hiring spree, of course, you should first try to make your business sustainable. Struggling to make ends meet, then piling employee incomes on top of that, could accelerate the demise of your business.
Protecting Your Business
Don’t assume your passion and drive as an entrepreneur automatically makes you a genius when it comes to every facet of a business. Even if you’re proud of your accomplishments, you can’t let your pride betray you. It’s not possible to know everything. Sometimes you must reach out to contractors to help you, especially when it comes to taxes.
You can find tax professionals in every city—and you should utilize them. They’ll make sure that you’re following local and federal laws, that you’re paying applicable tax rates, and they can even teach you how to capitalize on your income and making certain tax codes work for you. Their knowledge and experience could save you legal headaches, fines, and even reduce your taxable income.
Knowing how to set up your business can further reduce headaches. Even knowing when to turn it into a limited liability company or incorporate it can secure your financial future. If you start your business as an LLC and your business goes south, for example, this could prevent you from personally incurring debt on behalf of your business. You must take how to set up your business into consideration from the beginning.
Since we live in a world connected online, you’ll undoubtedly use computers to help run your business or cultivate new customers. Seeking outside help—perhaps from IT contractors—is one way to protect yourself from cyber-attacks. Cyber criminals these days have numerous ways to steal your information—including banking information. If your business starts out slow and money is tight, identity fraud could ruin you.
A common way cyber criminals get peoples’ information is through phishing attacks. Phishing is when someone sends you an email and embeds a link. They usually attempt to deceive you by portraying themselves as someone else, someone you know, to increase the chances of you clicking that link. If you do click a dodgy link, it could immediately compromise your security.
Businesses lose more than half a billion dollars a year to phishing scams, so you should treat every email with suspicion. Always check the email address of the sender. If it seems in any way suspicious, don’t click the link in the email. Scrutinize the email. Also, if it purports to be from someone you know, send them a message and have them verify whether or not they sent you a link.
In the beginning, entrepreneurs face great odds. The chances of your business failing far exceed the odds of it succeeding. While you face many challenges, you must always stand resolved to meet them. Understanding how to identify challenges can position you to overcome them. By figuring out what people need and how to court customers, you can increase your chances of success. Once you’re on your right footing, you should also know when to hire new people and when to let them go. You should also know when to hire contractors, such as tax specialists, to help you secure your future. In the end, the success of a business relies on its entrepreneur’s willingness to learn from mistakes and to know when to ask for help.
Steve Orowitz is a recently retired business owner turned consultant, with a passion for entrepreneurism and technology. When he isn’t writing or consulting, you can usually find him out on the river with his fly rod, or hiking in the hills near his home in Fort Collins Colorado.