Simple Ways Of Starting a Small Business
The United States has 28 million small businesses and these businesses comprise of a whopping 99.7% of all businesses in the US according to figures provided by the small business administration.
Small businesses are located everywhere in the country with some of them having a unique idea while the others are trying to design a career or working towards financial independence. In most cases, people are investing money in themselves and their ability hoping that the small business will lead them to a secure life.
Small businesses are being established throughout the country but the failure rate among small businesses is quite high with two-thirds of the business failing within the first two years and about 50% managing to survive for about five years. The reasons for the failures of small business are numerous but the most common among them are the following:
People Begin A Small Business Without A Business Plan
In order to make a small business into a reality, people initially need to have a business plan which is similar to a blueprint that will guide the business from the start-up phase until the establishment and ultimately towards the growth of the business. A business plan is a must for every small business and the high number of failures which are noticed is primarily because the business owners haven’t prepared a business plan. People are not required to hire professionals to create a business plan but can keep things simple by preparing a plan themselves.
A Small Business Can Be Affected By Lack of Financial Planning
Starting a small business may not seem like a great deal but will nevertheless require an initial investment along with the ability to sustain any ongoing expenses. Small business owners generally do not consider financial planning as an important aspect and neglect to take into account the costs for licenses and permits, legal fees, equipment, insurance, branding, inventory and a number of things.
They also fail to consider the costs of managing the business for at least 12 months and often fall short of cash when it is most required. Having a financial plan is also an essential requirement for people if they wish to ensure that the small business they have decided to establish will succeed without causing them to fail within a short time.
An Accounting System Is Essential For A Small Business
A small business can run effectively if it also has proper systems in place. One of the most important is the accounting system which is essential for the business. The accounting system will be helpful to create and manage the budget of the business, conduct business with others, file taxes, etc. Small business owners can consider setting up an accounting system themselves or hire the services of an accountant who will be able to handle this task effectively.
A Small Business Also Needs A Suitable Location
A small business without a suitable location can be assured of just one thing and that is a failure. Entrepreneurs that are trying to set a small business must conduct proper research to get a suitable location for their business because it can mean the difference between success and failure.
They must also consider the entire set up along with any equipment which is needed to ensure that the business location chosen is appropriate for the kind of business they intend to establish. They also need to consider whether they should invest money in purchasing the property or leasing it out during the initial phase.
Setting up a business is always challenging regardless of whether it is small or large. Entrepreneurs that are not considering the factors mentioned above are inviting the prospect of a failure and are advised not to do so. After all, they just need to consider the simple ways of starting a small business to ensure success.
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