Did you know that around 80% of new businesses fail? On top of that, this statistic is drawn from only the first 18 months a business opens. Running out of cash is the primary reason, but we will delve much deeper into the reasons to help prevent you from becoming another statistic and help you thrive in this economy. Mainly, don’t be just another business, find a way to stand out from the rest.
Finding out your strengths and weaknesses as well as other companies within your market place will help you seek those opportunities.Tweet This
Many steps need to be taken including making the building ready for safe work conditions, all the way to planning, marketing, budgeting, and hiring the right staff. Creating the right business model is where it all begins. This requires anywhere from understanding your well-defined target market all the way to market research and more. Without a good business model, this may not last long. Make sure you understand the target markets buying habits and behavior as well.
“Starting a business from scratch isn’t the only way to build an empire and establish a long-term financial investment. Buying an existing business comes with many advantages and is often considered a less risky investment if you’ve done your research.” – How to Value a Business
Your average business model would most likely include key partners, key activities, key resources, value propositions, relationships, channels, customer segments, cost structure, and revenue streams. The cost structure is necessary when compared to your revenue streams, even though it may take an average of two to three years to make a profit, you need to be mindful of what you’re spending and make sure your revenue can generate in the future. With so many new businesses popping up and many more entrepreneurs out there, you will need a strong value proposition to show what you can bring that’s unique to the customer.
If you’re going into business with a partner, it is important to come up with this model together so you are on the same page and have a full understanding of what is expected, a timeline could help with this as well. You need to keep the location of your business in mind too. Make sure you don’t put your business across the street from an established company that has the same services or product.
Knowing your target market is very important. You won’t sell much if you are targeting consumers that don’t fit your demographics, psychographics, and geographic. Putting money into marketing is vital for any company, don’t waste dollars before you do the research. You shouldn’t try to sell roller blades to an eighty-year-old or meat to a vegan.
Study your market and learn the way they talk and the places they hang out on social media and in public. There are ways that you can specifically target your audience using social media campaigns. You can pick anything from age, gender, location (even down to the city), income, and more. If you truly learn who your audience is, you can put yourself in their shoes and think about what would attract you to your business.
Finding out your internal and external analysis is necessary. SWOT stands for strengths, weaknesses, opportunities, and threats that face your business. You need to look at any opportunities in the market place with the threats in mind. For example, if you’re selling the same item or service as an established rival company, find a way to attract the customer to yours instead. If you can cut production costs or even look into promotional ideas to draw them in.
Finding out your strengths and weaknesses as well as other companies within your market place will help you seek those opportunities. You can find out why the rival company is successful in their strengths and plan around that, or you could understand their weaknesses and expand on how you can use that to your advantage. Knowing the other businesses in your direct market place is a big key to your success.
There are many reasons why so many new businesses fail, but if you follow these suggestions and really do your research, you have a much better chance of success.