Ralph Waldo Emerson said Build a better mousetrap , and the world will hit the road to your door.”
But when you start your own business, there is no guarantee that your “mousetrap” will survive, especially in today’s fast-paced business world.
Almost half of all small businesses fail in the first two years of operation. The number one reason for business failure is inadequate planning. The second reason is under-capitalization.
So before you mortgage your home, or get into financing your business debt, you need to know if your business will do more than last – you want to know if it’s good enough to flourish! Here are three things successful businesses that have survived in business for five years or more have in common: Ralph Waldo Emerson said Build a better mousetrap
1. The idea. Starting a successful business always starts with an idea. Something that makes your business stand out from the rest. So how do you know if you have a good idea?
You might get a great idea if you can answer yes to the following question: Does your idea provide a solution to a significant problem for your target market? Does it satisfy needs or wants? Does it create an opportunity?
The most successful business fixes the problem (either actual or perceived), or enhances your customer’s enjoyment. They create a re-need for the product or service among the target market.
2. Market. Your chance of survival is better if you can answer the following questions with the question yes: Has there been a market for your product or service? (It’s much easier to make ends meet than trying to create an entirely new market.) Can your target market be able to afford your product or service? (If they can not afford it, no matter how great, you will not sell it!) Will your target market value your product or service as valuable? (If they want to, but do not think it’s worth selling, you will not make a sale.)
3. Your ability Do you have the people, the resources and knowledge to be able to consistently provide your product or service to your target market? Can you maintain a competitive advantage? Do you have enough manpower? Can you buy the supplies and materials you need in the long run?
Your first step is to create a solid business plan. Your business plan is more than an essay on “Why I deserve funds for my idea”. Do not spend all the time making business plans and then throwing them into the bottom drawer of your desk. Your business plan should be a road map of life and breathing that helps you make sure you are on track and achieve the goals you set for your business.
The second step for business continuity is getting sufficient financing. Although the term “bootstrap entrepreneur” describes most small business owners, having enough capital to keep your business going is vital to your survival.
As you make a financial analysis of your business, make sure you are realistic about costs and expenses, so you give yourself the pillows you need to succeed.
If finding financing is a problem, because you do not have enough credit or equity, or there are other issues, take a moment to look at the resources available in your community. There are a variety of grants and loans (including microloans) for employers, if you know where to look.
Some great resources will be: – Small Business Administration – Local Small Business Development Center – Women’s Organization – International University or Community College -Chamber of Commerce -SCORE (Association for Retired Executive) – Non-profit organization working for economic development in your region
Use other successful business models as a guide. When you start, look around. What business is successful? Why? What do they do that work? What attributes do you admire, and why? You have a better chance of success if you model someone who has been successful.
Find a mentor. Most entrepreneurs have great abilities and abilities, but no one does it all well. You may already know your strengths and weaknesses. (If not, there are plenty of sources and tools that can help you figure it out!) Instead of ignoring your weaknesses, find a mentor who can help you build your skills in a weaker area, or offer advice to get what you need.
If you take the time to plan for success, you can create an inheritance that will be enjoyed by future generations, and that other entrepreneurs will be viewed as a model for Ralph Waldo Emerson said Build a better mousetrap