Studies by the Small business Administration, the U.S. agency charged with small business, indicate that only ¾ of small businesses survive the first 2 years and of these, less than 39 ½ % survive the first 6 years. It is therefore clear that for success in your business, you must choose your business venture carefully. Start a business you are passionate about: The only time you should go for something you are not passionate about is when you want to make some quick cash and get out. For long-term ventures, you will need to be passionate about what you are doing. If you truly believe in what you are marketing, potential clients are more likely to believe you. If you have real passion for your business, you are less likely to give up even when the venture is not doing well.
Be realistic: You should be realistic about your strengths and weaknesses. The business venture you choose should be based on a thorough analysis of the market. To be successful, you should not start a business that others are successful in since it will soon be crowded. Rather, you should look for untapped opportunities and create a niche for yourself. However, a business that offers essential services and products such as groceries and eating places will always do well. For such a business, your main concern should be getting the right location and building brand loyalty. If you are in a field that has many competitors, differentiate yourself from them. Start a business in a rapidly growing sector. This way, even if you are forced to quit after a few years, you will have made enough money. There is an annual business Failure Record report by Dun and Bradstreet that can give you pointers.
Sell a service or product that has repeat buy: If you have a service of product that people will always come for, your business will never run out of customers. Establishing as loyal customer base is difficult and profiting from a customer you have worked hard to bring in only once does not make much business sense. Maintain a high profit margin: Having a high profit margin is the only way to self-finance the growth of your business. It is also the only way your business will survive through tough times. Note that if you have a high price, the customers will think your business has better quality than your competitors, but you should not overdo it as you will drive away potential customers. Always make sure that you are making more than you are spending.
Get the right staff and reward well: You should get the right staff, train them, and reward them well. If you do not reward your employees well, you will not be assured of their loyalty and they will not give 100% to the business since they will not be motivated. Get a professional team behind your business such as lawyers and accountants. This will save you a lot of money, energy, and effort. You should consider forming a professional board of advisors for your business consisting of these and other advisors.
