Congratulations on deciding to start a small business. You probably have it all sorted out – what your business is going to be, the products/services you offer, and product pricing. Or perhaps, you have just decided you want to start a business but have not decided anything beyond that.
Whichever frame of mind you are in, it’s best to be fully aware of the nitty-gritty of a small business before starting your venture. The reason is simple. Over 50% of startups fail within the first five years, and over 70% fail within the first decade.
Here are three valuable tips to ensure your small business venture begins on a positive note and continues to make progress through the years:
Protect your business with professional liability insurance
Picture this. You have a successful startup. Your service is reliable and affordable. Your services are appreciated by your customers. But one day, you fail to fulfill a customer’s requirements – which, in turn, leads to severe implications for your client. Your client sues you and your company for unsatisfactory service. You lose money on costly litigation as well as a hefty settlement. With no money, the quality of your business’ service goes down. You lose customers, and your business declines.
Professional liability insurance can ensure the picture you just envisioned does not become a reality. Professional liability insurance is insurance that you take out to protect you and your business from claims of negligence, unsatisfactory services/products, and even miscommunication.
The insurance will ensure all the costs related to the claim are taken care of. This includes lawyer’s fees, settlements, and judgment fees. Your business continues to run smoothly; your money is secure, and you continue to make money. So, before you start with a new small business venture, ensure you have professional liability insurance in place.
Start your business with a business plan
Every business – big or small, must begin with a business plan. A business plan is a written document that sets out a business’ objectives and goals and strategies to achieve them. A business plan contains the marketing, financial, and the operational viewpoint of the business. It contains an overview of the products and/or services offered by the business, its customers, as well as its suppliers.
A business plan will serve two immediate purposes:
The primary aim of a business plan is to help you run your company by giving you a clear view of all the different aspects of your business. This makes analyzing the business in its entirety easier.
A business plan is also required to get financial assistance for your new businesses. It helps demonstrate that your business has a serious plan and a roadmap to success. With a realistic forecast of your business detailed out in your business plan, you have more chances of getting the investment you need.
Spend your business money wisely
When you start your small business, it is natural for you to want to impress your customers with your business setup. So, you end up making investments that are unnecessary at this stage. Some of these investments include expensive electronic goods, new furniture, expensive office space, and attractive but expensive stationery. While all this will certainly do wonders as far as impressing your customers goes, they do very little for your business.
Instead, concentrate on providing excellent, reliable, and recommendable products/services that will help you retain customers and build your customer base.
As far as the invests mentioned are concerned, invest in second-hand furniture that you can find at furniture stores that sell discounted second-hand furniture. Buy stationery in bulk from wholesalers who sell at discounted prices. Manage with your existing electronic goods or buy the bare minimum. Buy upgradeable equipment that you can upgrade when your business picks up. Choose office space wisely. It is more important to find a location close to your customer base than expensive real estate. Remember, every penny saved is a penny earned.
Finally, remember the adage – failure is a stepping stone to success. It is a saying that holds for all business ventures. There will be ups and downs as long as your business is alive. While it is impossible to predict the future outcome of your business, you do have the power to face challenges and failures and use these as stepping stones to your business’ success. Use every failure and every challenge that comes your way as a lesson learned. Follow these tips, and you will definitely start your new small business venture on a solid footing.