Starting A Business
Starting a business takes a combination of skills. You may have some of these skills naturally, you may have schooling or business experience that will benefit you when opening your own place or you may need help. An important place to start in being successful is knowing yourself and whether you "have what it takes" to succeed. Although you won't know for sure until you actually take the plunge, there are certain traits that are common among successful entrepreneurs.
Is Entrepreneurship For You?
There is no way to eliminate all the risks associated with starting a small business - but you can improve your chances of success with good planning, preparation, and insight.
- Are you a self-starter? It will be up to you to develop projects, organize your time, and follow through on details.
- How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, and professionals such as lawyers, accountants or consultants. Can you deal with a dstronganding client, an unreliable vendor, or a cranky receptionist if your business interests dstrongand it?
- How good are you at making decisions? Small business owners are required to make decisions constantly - often quickly, independently, and under pressure.
- Do you have the physical and strongotional stamina to run a business? Business ownership can be exciting, but it's also a lot of work. Can you face six or seven 12+ hour workdays every week?
- How well do you plan and organize? Research indicates that poor planning is responsible for most business failures. Good organization of financials, inventory, schedules, and production can help you avoid many pitfalls.
- Is your drive strong enough? Running a business can wear you down strongotionally. Some business owners burn out quickly from having to carry all the responsibility for the success of their business on their own shoulders. Strong motivation will help you survive slowdowns and periods of burnout.
- How will the business affect your family? The first few years of business start¬up can be hard on family life. It's important for family mstrongbers to know what to expect and for you to be able to trust that they will support you during this time. There also may be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk in the short-term.
Why Small Businesses Fail.
Success in business isn’t based on luck - although a little never hurts. It depends primarily on the owner's foresight and organization. Even then, of course, there are no guarantees. Starting a small business is always risky, and the chance of success is slim. According to the U.S. Small Business Administration, over 50% of small businesses fail in the first year and 95% fail within the first five years.
In his book Small Business Management, Michael Ames gives the following reasons for small business failure:
- Lack of experience
- Insufficient capital (money)
- Poor location
- Poor inventory management
- Over-investment in fixed assets
- Poor credit arrangements
- Personal use of business funds
-
Unexpected growth
And then Gustav Berle adds two more reasons in The Do It Yourself Business Book:
- Competition
- Low sales
More Reasons Why Small Businesses Fail.
These figures aren't meant to scare you, but to prepare you for the rocky path ahead. Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.
On the Upside...
It's true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks.
- You will be your own boss.
- Hard work and long hours directly benefit you, rather than increasing profits for someone else.
- Earning and growth potential are far greater.
- A new venture is as exciting as it is risky.
- Running a business provides endless challenge and opportunities for learning.
Our goal is not to scare you into not starting a business, but to scare you enough that you create a plan, do your research and execute well. Forewarned is forearmed!
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