There are 26 million small businesses in the United States; they’re the engine that creates jobs and drives our economic growth. Unfortunately, the failure rate of new businesses is high. Many don’t survive their first year in business. Most are no longer in operation by year 5.
Here’s the good news: You and your business don’t have to become a statistic! Whether you’re starting brand-new–or just starting over–you can build a profitable business if you know The Seven Deadly Sins of Small Business Owners, and how to avoid them.
THE FIRST DEADLY SIN
I’ve seen it over and over again. A contractor wouldn’t dare to think about starting a construction project without having a blueprint to work from. But he’ll rush ahead, go into the construction business, get a second mortgage on his house, roll up $1,000s in IRS debt, and create untold emotional stress on himself and his family–all without sitting down to write out a blueprint for his business.
You must start with a written business plan. I’m not talking about some fancy, formal 50-page typed document filled with MBA jargon, color graphs and spreadsheets. By “business plan’, I simply mean a straightforward statement, on paper, of your business idea, who it will serve, why it will bring value to future customers, and how much money (top-line and bottom-line) you expect to see over your first months in business.
Most entrepreneurs think they don’t need a business plan until they’re looking for a bank loan or seeking partners. That’s stinking thinking. Writing a business plan gives you a chance to thoroughly evaluate your new business concept inside and out.
Putting your ideas down on paper forces you to spend some time in the weeds of detail. Some put it off because it’s not always easy to project what the future will look like. Sometimes it can feel like you’re pulling information out of the air — especially when it comes to the numbers.
Small business owners have the tendency to be self-reliant and “go it alone” when faced with a challenge. Trust me, that’s not a smart move when it comes to business planning. As Proverbs advises, there’s wisdom in many counselors. The good news is you can find plenty of people and resources available to help you in writing a business plan. Here’s a couple approaches I took personally which I highly recommend to you.
- When I first started my business, I connected online with a number of highly successful owners outside of my local market. We first connected via online forums or public discussion groups; this led to personal contact via email and phone. They didn’t see me as a competitor, and I was surprised to learn that many successful people love to help others become successful too. Taking this approach can be a great way to ground your projections and expectations in reality.
- Another approach is to find the “go to” experts in your business category, and take advantage of their training systems and podcasts. (In in the Heating & Air Conditioning field? Go here . Are you a chiropractor? Listen here.) You’ll discover high-profile industry experts who’d love to help you — although for a fee. I chose to go this route as well, exchanging my money for the opportunity to learn; the knowledge I gained was worth the investment.
Those are the roads I’ve traveled, but there’s also SCORE and other resources available (too many to list here) that can help you build a business plan for success.
ANCHOR ON THIS: Regardless of whether you run a small, part-time business from home, or direct a large company with several offices, you’ll find it difficult to operate without a simple, written, effective business plan. Writing a business plan will help you see the potential strengths and weaknesses in your enterprise, uncover potential pitfalls, and–most importantly–think up ways to avoid them before they actually happen. This, in turn, will keep you and your business from becoming just another statistic