People have been telling you for years that you make the best cakes in town. Now you've gotten enough money together, come up with a business plan, and you're all set to open your doors and let the customers roll in, but how can you be sure of success?
The U.S. Small Business Administration says the first three years are the toughest for any fledgeling business; three out of every ten will close in the first two years, and half will be gone in five. The Bureau of Labor and Statistics showed similar statistics, showing only about a quarter of small businesses will last for 15 years or more.
To optimize chances of success, monitor your business banking and cash flow. If you have friends and family willing to support your business, don't hesitate to let them. Moral support can sometimes be the biggest help. It's also important to "live below your means," so to speak. Don't spend too much on things you don't really need, and if you aren't sure about how to grow your business, seek out a financial planner.
"I wish I had spoken to…a C.P.A. with small-business expertise," said Elizabeth Kavanaugh in a New York Times interview. Her printing company, Large Format Digital, filed for bankruptcy after a $1 million construction loan left her business with too much debt and not enough customers. "It was literally like someone turned off a faucet."
Be sure you have a plan in place in case you run into problems. This could mean everything from a fire to a data breach, a natural disaster or a protest shutting down your operation temporarily or for longer periods of time. If your vendors go out of business or your customers start leaving for a competitor, you need strategies in place and fallbacks to protect you and your investment. Find alternative methods of funding and advertising, and be sure to ask your clients what they prefer and what they dislike about your business.
Never be afraid to tweak or completely do away with things that don't seem to be working. It's better to admit a mistake and fix it than join the hundreds of thousands of small businesses that closed just last year. If you want help don't be afraid to ask, and My Bank will be there with financial advice whenever you need it.