Small Business Survival

Now that you are thinking about starting your own business, have you considered your chances of survival? Before you get started, you should be aware of the statistics on small business survival and failure.

Odds of Success

When you start your own business, you may have to wear many "hats". You may have some great ideas, but fail on the more "administrative" tasks that are needed to be successful. You need to know your strengths and weaknesses. Lack of management experience accounts for many small business failures. Entrepreneurs often think that they can do it all and may not seek out help when they need it. Do not be shy about seeking out the advice of expert advisors, networking with other entrepreneurs and hiring staff to work on the tasks that you are not good at.

On one hand, desire and persistence along with innovative thinking can improve the odds of having a successful business. Do you know what you want to achieve? Determination, setting goals, paying attention to detail and motivating others are key elements for your success and business growth.

On the other hand, desire and persistence alone will not make you successful. A lot of people love to cook and are good at it too. So, they dream of starting a restaurant. However, there are already many restaurants, the profit margins are slim and consumers have lots of choice. To be successful in that market, you need to truly be offering something new or unique. In short, you need to be sure that there is a big enough market for what you plan to offer and that the competition isn't already too strong.

Survival Tips

These tips can help you to overcome many of the factors that lead to small business failure.

  • Develop a good marketing and business plan that takes into account customer needs, competition, pricing and promotional strategies.
  • Have a good working knowledge of business law or hire a lawyer.
  • Understand your business finances, such as cash flow and handling credit.
  • Keep a good inventory of your products or services and your existing customers.
  • Supervise, train and motivate your staff.
  • Make sure you have the experience, expertise and talent to run your business.
  • Plan every part of your business from start to finish.
  • Know your market and define how much of it you will be able to capture.
  • Make sure you are offering a product that is unique and competitive or at a lower cost than that of your competitors.
  • Don't under-estimate your expenses and over-estimate your revenue.
  • Make sure you have some cash reserves or a line of credit to help you get through slow periods
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