Despite the common belief that 50% of all new businesses fail in the first year and 95% fail within five years, the latest statistics from the Small Business Administration show that two-thirds of all new businesses survive for at least two years, and 44% of them survive at least four years. The reasons cited for businesses failures are all preventable with the right foresight and planning. To succeed, the motivation should stem from something deeper such as believing your product/service will meet an important need and having the drive and belief in your business.
Another reason for business failure is not having sufficient capital. It is important to know what the company’s ongoing expenses will be and have the financial resources to meet these obligations. Business difficulties can often be attributed to inadequate management; that is a failure to secure individuals with the right expertise in key operational areas (i.e., finance, human resources, quality controls, customer service, sales and marketing, etc.). Not recognizing the importance of having a well-developed sales and marketing plan also can contribute to a business’ downfall. It is important to know one’s target markets and use sound marketing strategies and tools (i.e., direct and Internet marketing, website, public relations, advertising, social networking, etc.) to raise awareness and position products/services effectively. Similarly, running a business without a business plan can lead to uncontrolled growth, missed opportunities, inability to meet contractual obligations, loss of customers and ultimately a business failure. Seek out an experienced strategic planner to assist in the development of an intelligent business plan that can be implemented and followed.
There are many valuable resources to help small businesses in a variety of areas. Some of the organizations are small business advocates offering support and troubleshooting, others are sources of financing, while still others provide information and resources in very specific areas. It is a good idea to create and maintain relationships with these organizations. Some of these groups are membership-based organizations where one will gain the greatest benefits by establishing membership. Following are some national business organizations offering valuable support and services. There are also many state and regional organizations, as well as industry-specific trade associations that should be explored.
–National Federation of Independent Business, the nation’s largest small business advocacy group
–National Business Incubation Association, the world’s leading organization advancing business incubation and entrepreneurship
–S.C.O.R.E. — Service Corps of Retired Executives, an organization of volunteers providing free, confidential counseling to entrepreneurs
–National Association of Small Business Investment Company, an association dedicated to helping self-employed and small businesses