Who to believe? Some say that the economy is great, others say the sky is falling. Honestly, I don’t know who to tell you to believe, but I do know that when the economy gets this way it is a perfect time to start a small business. Have you, or will you be one who takes that step and start a small home-based business this year; possibly joining some network marketing company? If so then you MUST read on.
Business Failure Statistics
Not to start out negative, but… The small business failure rate is initially very high; the chance for a small business to succeed increases after the five year mark. According to a report in the May 5, 2004 issue of USA Today, the failure rate of small businesses is as follows:
- First year: 85%
- Second: 70%
- Third: 62%
- Fourth: 55%
Why Small Businesses Fail and What You Can Do to Avoid the Statistics
You just read the statistics, but what are the reasons? More importantly, what can you as a small business owner do to avoid becoming one of those dreaded statistics? In this article, the basics of your business will be briefly discussed.
The above statistics are, of course, reflective of small businesses in general. There are many important aspects to running a successful business today. Such as: financial requirements to get the business started, generating/developing revenue, managing and controlling growth.
But there are a few questions that you must examine and ask yourself first.
- Passion – What is your passion, and why do you want to start your own business?
How do you find your passion? A question we all should ask at least once in our lifetime. The three questions below will get you on the road to finding your passion.
- What would you do if you could do anything and not fail, and money was not an option?
- What people-group touches your heart?
- What story in the news causes you to take action?
The answer to these three simple questions is quite possibly your passion.
- Vision – What is your vision, and do you know how to communicate it?
To communicate your vision it must be:
- Crisp – you must be able to share it while on an elevator ride
- Clear – when the people walk off the elevator they should be able to explain it to others and
- Compelling – those same people on the elevator will want to get involved with you to help reach that vision.
If you are like many who are asking, “How do I find my personal vision or a vision for my organization?” the following questions will help you on your quest:
- Look within you: What do you feel?
- Look behind you: What have you learned?
- Look around you: What is happening to others?
- Look ahead of you: What is the big picture?
- Look above you: What does God expect of you?
- Look beside you: What resources are available to you?
- Understanding that you no longer have a job, you are the boss. What is the difference?
Are you really good at what you do, so good that people continually complement you on your products, services, and/or your attention to detail? Then one day you decided (or are planning) to leave the world of getting a W2 and entered the world of being an entrepreneur. All of sudden everything is up to you; you are the boss. A boss now working more hours than ever before, getting paid less, and carrying more responsibility than when you were an employee. The good news is there is hope – your business can be all that you dream it to be. A business that provides you with a great living and utilizes your talents and skills. However, in order to reach this plateau you must have a plan of action, operational systems and a great business coach to help put your business on the right track.
- Systems run successful businesses, and people run the systems. What systems are needed in every business?
- Profit Analysis – Increasing your bottom line by analyzing your prices, margins, and costs.
- Marketing – Understanding how you attract your customers, and how to attract even more.
- Time Management – Maximizing your time by working more “on” your business.
- Organization – Without structure you will never be able to build a long-lasting business.
- Staff and Leadership – It has been said before, but it is true, “Teamwork makes the dream work.”
- A well equipped team will result in a thriving business? How are you developing leaders in your business?
Not only do you need to be growing your leadership skills, you need to be growing your staff’s too. But you must first hire them, and how you choose them is critical. What should you look for in a team player? The list below was provided to me by Pat Williams of the Orlando Magic.
- Assess ability – Choose team players well, according to how well their strengths and skills fit the goals and tasks of your organization. Ask yourself, “Why does this person want the job? Ambition, a love for this kind of work, a sense of calling, an eagerness to succeed in our organization? Or has this person simply failed in three or four previous jobs?”
- Choose coachable people – Coaching keeps a team synchronized, harmonized, and growing together. A team without coachable players is not a team. It’s just a collection of flying egos.
- Think “Chemistry” – Talent sticks out; chemistry is harder to see. It’s the magic ingredient of a winning team. What we call “chemistry” is really a combination of a lot of factors: ability and skill levels, drive and ambition, personality, emotional makeup, values, communication, and people skills.
- Strive for balance – it is very important to balance skills in order to generate effective team success. No team is full of Michael Jordans, therefore, you have to find people with specialized skills to fill the positions on your team.
- Recruit the best – build a quality team out of quality people who are always reaching for the next level of excellence, both individually and as a team. This will help you work smarter rather than harder.
- The final – and perhaps most important – think about acquiring top talent to build a successful team: Invest for the long term. Make today pay off tomorrow. You have to plow some ground, plant some seeds, and do some watering if you’re ever going to reap a harvest. You must invest in your team.