Between 2013 and 2014, over 5% of 14,405,210 businesses surveyed closed their doors due to inefficient cash flow. A lot of things can go wrong for an entrepreneur, but if you plan ahead and determine a specific goal, understand your market, choose your location wisely, and conduct a proper financial risk analysis, your chances of success will remain strong and steady.
4 Secrets of Success for Small Businesses
- Set a clear goal
First, your goal should always be written down or documented somewhere. Your business’s goals should have a set timeline. There should be a system in place for measuring success and documenting progress. Your goals should be prioritized wisely.
- Know the market
You must have a target market in mind. To determine who will use your product, where this demographic is located, find a location in which there is a lack of your product or service, and identify your competitors, you will need to conduct extensive market research. Many entrepreneurs make assumptions about their target market, but relying on instinct alone is one of the fastest ways to failure.
- Find the best location
Everyone has heard that a business’s success is all about location. This is partially true. When deciding where to set up your business, do not settle on the first space available. Take into consideration all of the risks associated with a particular area. Consider the climate, neighborhood, type of building, and the kinds of natural disaster risks present. There may not be many facilities available immediately, but do not rush the process and settle for something less than adequate. This could cause you to pay more for a location than you need to.
- Assess your finances
If managing finances is not your strong suit, it is vital that you ask for help. Nearly half of businesses fail because of financial “incompetence”. They have no knowledge of financing, no experience in record-keeping, no understanding of pricing, have poor credit granting practices, expand too quickly, or waste their advertising budget. In order to adequately conduct business and keep your company afloat, you must have a strong understanding of financial ratios, be able to calculate total current assets, and have the ability to plan for the future. The reality is that 25% of all businesses fail after their first year in operation. Oftentimes this is related to poor spending and financial planning. If you are struggling with your financial statements or want to learn how to make better business decisions, you should work with a company that provides data services such as financial risk analysis, and business intelligence solutions. With financial risk analysis software, you will be able to easily manage, track, measure, and predict your financial success.
If you have any questions, feel free to share in the comments.