Barry Ritholtz, writer for The Big Picture, reported the following statistics earlier this year: 85% failure rate in the first year, 62% failure in year 3 and by year 5, a business has a 50/50 chance of surviving for five years or more.”
Expert opinions abound about what a business owner should and shouldn’t do to keep a new business afloat in the perilous waters of the entrepreneurial sea. There are, however, key factors that, if not avoided, will be certain to weigh down a business and possibly make it a statistic rather than a success.
The following 4 keys are compiled from numerous experts.
- You start your business for the wrong reasons
- Poor management
- Insufficient capital
- No or poorly designed website
Over the next few weeks I will talk about these four key factors that contribute to a highly successful business.
1. You start your business for the wrong reasons.
Would the sole reason you would be starting your own business be that you would want to make a lot of money? Do you think that if you had your own business that you’d have more time with your family? Or maybe that you wouldn’t have to answer to anyone else? If so, you may want to rethink your suitability to becoming an entrepreneur.
Following are several reasons that have a better chance at entrepreneurial success:
• You have a passion and love for what you’ll be doing, and strongly believe, based on educated study and investigation, that your product or service would fulfill a real need in the marketplace.
• You have drive, determination, patience, and a positive attitude. When others throw in the towel, you are more determined than ever.
• Failures don’t defeat you. You learn from your mistakes, and use these lessons to succeed the next time around. It is noted in studies of successful business owners, that they attributed much of their success to ‘building on earlier failures’, on using failures as a ‘learning process’.
• You thrive on independence, and are skilled at taking charge when a creative or intelligent solution is needed. This is especially important when under strict time constraints.
• You like — if not love — your fellow man, and show this in your honesty, integrity, and interactions with others. You get along with and can deal with all different types of individuals.
• You are physically fit and possess the needed mental stamina to withstand potential challenges. Often overlooked, less-than-robust health has been responsible for more than a few bankruptcies.
Do you see yourself in any of the above? Next week I will address poor management and how it affects a business’s ability to grow and thrive.