Every year, thousands of new businesses start around the country. This trend is only getting larger as more people take advantage of the lower startup costs and vast size of the online marketplace. However, half of these businesses fail five years after they begin. A successful new business requires planning, hard work and a fair bit of good fortune. There are some important steps you can take to improve the odds.
Save for a Rainy Day
When a new business begins, there can be sudden influx of funds as new clients make purchases or hire services. It can be tempting for the owner to invest all that money back into the business, trying to build on the current momentum. However, most businesses do not experience constant growth, but cycles of growth and decline. Putting a portion of your profits into savings can help pay your operating costs in the slow times as well as prepare you for unexpected expenses. If a critical piece of equipment breaks and you don’t have the funds to fix it, your business could be in serious trouble.
Resource: https://www.priestessoffinance.com/one-on-one-financial-coaching
Open a Business Line of Credit
A common issue for businesses trying to grow to the next level is funding expansion. Even if you have a track record of profits, it may not be enough to pay for expanding the services you offer or opening another location. A business line of credit can give you the financial boost you need to reach your goal. Most lenders will loan up to a certain percentage of your gross revenue. The more successful your business is currently the more willing lenders are to support you.
Resource: https://sunwisecapital.com/other-loans/unsecured-business-loans/
Be Clear About Your Purpose
One of the reasons new businesses fail is a lack of purpose or mission that drives the business. Especially as the business starts to succeed, there can be many distractions from the original purpose. A clear mission can help focus you and your employees, reminding you to stay on task. You want to make money, but clients are attracted to businesses who know why they are there and what they stand for. Doing the work of creating a mission statement will give you a direction for growth. It will improve your organization and your relationship with your clients.
Resource: https://www.kinesisinc.com/how-to-write-a-powerful-mission-statement/
The start of a new business is an exciting moment with many possibilities. Keeping that business open and growing will take some serious strategy. With planning and purpose, your business will be healthy for years to come.