The future doesn’t seem particularly bright for anybody looking to start their own business today. One walk down the average high street can provide a warning to would-be entrepreneurs, with many a store having closed down, both big and small. And the future doesn’t seem great for online business owners either. With competition from the giants of the business world, i.e. the major supermarket brands and Amazon, businesses both on and offline have suffered.
But hey, despite the statistics highlighting business failure, it is still worth noting that some businesses do survive. So, if you are planning on starting your own business, before you get the ball rolling, you might consider ways to reduce the risk of failure.
Here are some suggestions.
#1: Get your financial affairs in order
Do you want to know the reason why many businesses fail? Money, or rather the lack of it. Many business owners fall into the trap of starting a business without sufficient capital for the day-to-day running of their operations. When profits are low at the beginning, they also struggle when they are faced with unexpected costs and are then reliant on credit cards and other loans to see them through. Debt is the unfortunate inevitability.
So, our advice is this. Ensure you are aware of business startup costs. Save as much money as you can to put into your business before taking out a business loan. Consider crowdfunding as a low-risk way to raise capital. And if you do eventually take out a loan, ensure you have the funds to both pay your monthly installments and have enough left over to run your business. Seek the support of an accountant too, as he or she will lead you away from any financial blunders. Then put money into both an emergency fund AND savings account to prepare you for the future.
#2: Consider buying a franchise
With an unknown brand name and a lack of public recognition, it can be a tricky few months for new business owners. However, you wouldn’t have to start from scratch if you bought a franchise. Not only would have the support of the franchisor (the company behind the franchise) to help you get started, but you would also have a recognized brand name with possibly a loyal customer base already. The franchisor might also have access to funds to help you get you up and running with your business, so there will be less risk of you starting your business in financial difficulty. Check out the following linked article for advice when considering what is the best franchise to buy, and then look for franchise opportunities near you if this is something that appeals to you.
#3: Do your research
If you are starting out with a business idea of your own, you need to research the market first. It’s no good starting a company that is too similar to others in your community, so you need to find your own niche. You are more likely to make a profit this way, as there will be less competition to worry about when trying to acquire customers to your cause. Do a Google search online, check local business directories, and read this article on market research for startups. With the right information to hand, you will have the ability to start a business that can be markedly different to others, and consequently, less doomed to failure.
There are risks to starting a business today, but by following our suggestions, you can safeguard yourself to a degree. Commit to further research online, and if you have any advice of your own to share, please let us know in the comments below.