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Boris Foxman. January 19th 2021

Keys to Business Start-Up Success

steps to register a nonprofit

Are you preparing to build a successful business? Do you have a great business idea and want to become a CEO of your own company?

Business success comes primarily from hard work and a little bit of luck. While connections play a vital role, these seven ingredients will give you the boost you need to move from a shaky start to sure success.

  • Quantify your ambition. Define success. Know how far you are willing to go to accomplish your goals. There is nothing wrong starting a business just for economic independence, but quantify what economic independence means to you. Put real numbers to it.
  • Study the market. Over 40% of business failures are due to lack of market need for their product or service.
  • Formulate a plan early. Nearly 50% of businesses fail within 3 years after they started, and only one third of all businesses survive after 10 years. The main reason for business failures is lack of business planning.
  • Start with little, or even no, money. Know where to get the money when you need it though as nearly 30% of businesses fail because their owners run out of cash.
  • Financial management is the key. If you lack money management skills, secure a partner with these skills or hire a CPA. Review your financial statements regularly. Do not stay anemic to financial trends, and invest in strategic assets. Keep basic money management guidelines in mind such as not spending too much of your early stage capital on payroll.
  • Hire the best, and treat them well. Though you don’t want to spend too much on payroll early on, nearly 25% of startups fail due to poor human resources. Only about 5% of companies evaluate candidates before hire while it’s been demonstrated that up to half of those interviewing will mislead you with false information.
  • Evaluate the risks. Train yourself away from fears, natural fears around risk, by taking measured steps. Most of the risks are insurable, such as physical damage to business assets like inventory and equipment, so talk to a knowledgeable agent to seek protection you need. Talk to your CPA to seek help protecting from tax risks in anticipation of high profits.

For many, entrepreneurship is a lifestyle. Your lifestyle prescribes your priorities, and one you should always consider is that learning from mistakes of others paves the way for wise business decisions, ultimately saving you money. Thus, one of the main reasons to hire professionals is to learn from their experience – by far the most valuable asset they bring to the table.

Sources:
Ron Berman, Pablo Hernandez-Lagos. Predicting Startup Using the Normalized Burn Rate.
CBInsights
SBA Administration
Dun&Bradstreet