To Be or Not to Be - Factors to Consider When Contemplating Starting a New Business
April 14, 2008
Dennis G. Egan, Jr., Esq.
While we've all heard that most small businesses fail within the first five years, recent statistics from the United States Small Business Administration put the number closer to 50%. While this recent number paints a somewhat rosier picture than previously thought, there are still a significant number of small businesses that fail. Knowing the factors that most often lead to this can be the first step toward deciding whether or not the conditions are favorable to start a new company. In fact, understanding why most small businesses fail can be the best roadmap to launching a successful venture.
One of the most important components of any successful company is its business plan. A successful business plan is firmly rooted in fact, based on the most accurate and timely information available, and it should address the following issues:
- The goals of the business and a roadmap for achieving them
- Financial considerations, such as capital requirements, expense forecasts and cash flow analysis
- A marketing and advertising plan
- Knowledge of direct competitors, and
- An accurate budget
Too often new businesses are launched without any clear cut plan to succeed. As a result, there are no benchmarks against which to judge progress. Oftentimes these business owners spend non-existent capital on unnecessary equipment or technology. While some entrepreneurs may have the knowledge and expertise to formulate a business plan on their own, most individuals should start by seeking the services of a competent, well-respected business consulting firm, accountant and/or attorney.
When deciding whether the time is right to launch a small business, it's a good idea to realistically assess your level of experience relative to the business you wish to launch. While experience alone does not ensure success, lack of it may likely spell disaster.
Experience helps to provide the level of understanding necessary to organize a business properly and offer quality products and services that match the needs of your potential customers. After all, if you don't understand what your potential customers want and/or need, they will not purchase your product and your business won't make any money. ...
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BusinessWest
March 31, 2008
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