If you’re a budding entrepreneur whose only objective in life is to start a business and succeed in the marketplace, then perhaps you should turn your head away from this statistic: eight out of 10 startups close their doors within 18 months. Yes, it’s a damning statistic, but it’s true nonetheless. So, if you’re launching a small business soon, be wary of these numbers.
A lot of young businesses fail in the infancy period because they lack a number of things. Indeed, they may not have a product or a service that satisfies the consumer, but it could also be due to the fact that the company has poor talent, inept cash management skills, or an antiquated business model or plan.
Or it could even be as simple as misplaced timing. For instance, in the city of Toronto, there was a business named Back Beat that was around during the early to mid-2000s. It specialized in selling records – jazz, classical, rock, etc. – and had great deals. You could purchase a vintage Charlie Parker record for just $5! It closed its doors around 2008, however, because nobody was buying records (obviously). Fast forward today, and the resurgence and renaissance in vinyl, the owner would’ve been doing quite well.
It’s all about market timing. If you entered the dot-com bubble in 1999 or 2000, then you would have been wiped out. If you bought a house in 2005, then you’d be broke. The list goes on.
Small businesses always have to work extra hard when competing with some of the much bigger names. If they fail to do this, then they’ll, of course, be part of that statistic cited earlier in this piece. It can be done, however. All it takes is some smarts, hard work, and a little bit of luck.
Thinking of opening a business? Here are 10 things every small business needs when starting out.
1. Cash Management Skills
When owning a business, your biggest responsibility will be managing cash. Whether it’s a corporate line of credit or managing the sales from the cash register, a small business owner’s biggest asset will be adding and subtracting, organizing and managing the firm’s finances. Without any sort of cash management skills, you risk being in the red for a long time and even miss payroll if you have employees.
2. Talent Recruitment Strategy
A small business owner who has a clear vision for the future will have an idea as to what type of talent they want to bring in. For the most part, an entrepreneur will want to bring in like-minded young professionals who want to be at the bottom floor with the hope of rising to the top. Many young millionaires attribute their talent recruitment strategy as the reason for their success. They hired talented people that wanted to have heavy responsibilities and had the acumen to achieve this.
3. A Data-Based Business Model
In today’s business world, it’s all about the data. It’s all about how you attain, track, and utilize the data. For businesses that have an e-commerce strategy, Google Analytics is an imperative component to the success of the company. Without it, all of that data will just go to waste and you’ll miss out on the opportunities. The enterprises of tomorrow will need to understand the data and how to streamline such information to the best of their ability.
4. Cloud Computing Expertise
Let’s face it: if you’re not in the cloud, you’re missing out on something big. Although there are some security concerns about cloud computing – this is improving with each passing year – it’s an efficient way to handle operations. Not only can you access important data on the go, your team of employees can also access the information when needed. Small businesses should take advantage of cloud computing because it saves the company money, it doesn’t require immense servers and computer equipment, and it saves space.
5. Social Media Plans
Much like cloud computing, if you’re not leveraging the power of social media, then you’re going to be left in the dust. Social network strategies are crucial to the marketing and branding process for small businesses. Without accounts on Facebook, Twitter, Instagram, and Google+, and without concrete strategies, then your business will not make any gains. A social media presence is needed right away.
6. Project Management Systems
From Trello to Basecamp 3, small businesses have a long list to choose from in the world of project management systems. Simply put: if you’re working remotely with employees situated all over the world, then a PMS is essential to the efficacy of your enterprise and the firm’s productivity levels. A decent project management system will ensure everyone is on the same page and you are meeting your targets.
7. Various Communications Tools
Akin to project management systems, your business should already have an array of communications tools at hand, especially – once again – if you have various employees in different cities, states/provinces, countries, and time zones. Skype, Google Chat, Facebook Messenger, and the like are all great communications tools to have.
8. Access to Necessary Capital
Although some business experts will present the case that you do not need a business loan to start a company, a lot of startups can’t get off the ground running without necessary capital. Lines of credit, business loans, and business credit cards are just some of the ways to get access to capital to rent an office, hire employees, or invest in products. The capital will prove to be even more of a necessity if demand for your product or service goes through the roof.
9. A Strong Website Design
Websites: the essential and most important part of your business. Surprisingly, there are still around 10 to 20 percent of small businesses in North America today that do not own a website. This is trouble. Every small business and startup should have a website, and one that maintains a stellar design and ease of use. Indeed, you’ll be on a budget, so using the likes of WordPress for your web hosting services, and then hiring designers through Fiverr, 99designs or Squarespace can be of tremendous help.
10. The Ability to Crowdsource When Necessary
If you can’t get your hands on capital, or you have an idea that you don’t want to waste on a financial institution, then perhaps the knowhow of crowdsourcing and crowdfunding is essential. A lot of young entrepreneurs rely on GoFundMe and Kickstarter to get their concepts and dreams in motion. If you have a unique idea, then it’s likely you’ll get funding almost immediately.
See Also: How to Revive a Small Business
Entrepreneurship is vanishing; the number of small businesses is on the decline, and who can blame them? Everything from hefty payroll taxes to the astronomical and burdensome regulations, launching a small business – even if it’s a great one – can come with significant headaches and costs. However, you shouldn’t let that deter you. If your dream is to open up a vintage cereal café or launch a Laundromat café or a pastry café, then you go on ahead.
You’ll just have to have the ability to achieve these dreams efficiently and with a lot of passion.
What do you think are some of the things small businesses need when starting out? Let us know in the comments section below!