"10 TIPS TO MAKE SURE YOUR BUSINESS SURVIVES THE FIRST FIVE YEARS"

Statistics show that 50 percent of small businesses fail in the first five years of operation in the United States alone.

United States’ Small Business Administration gives reasons why such businesses fail regardless of their industry

Despite the high rate of failure, research has shown that graduates from the best universities ...are opting to start their businesses as opposed to getting full time employment.

It is very important for an Entrepreneur make sure that he chooses a right business before embarking on one but it is also true that choosing a right business is not enough.

One needs to thoroughly plan and ask this important question: “How can I keep my business from failing?”

If a small business has to survive the first five years, the owner of such has to be an entrepreneur and should be well informed about the business.

Below are 10 good suggestions that can ensure an entrepreneur keeps his business successful:

Wait a minute, like any other set of instruction, if you want them to work for you, you should start practicing them right away, here they are:

1. Have Business Knowledge

It is very important to invest in business knowledge by attending workshops as well as courses that are empowering. This includes knowledge of how to write a brief business plan as well as basic bookkeeping. Through these workshops, an entrepreneur will be able to understand what it means to approach financiers such as banks. You should learn how to search for information through search engines such as Google and many other sites.

2. Having enough capital

After acquiring good business knowledge, it is essential to have enough capital to set staff of a business without which it will fail. It is important for a small business to be self sufficient with enough capital for six months before considering using some of its profits. Salaries as well as bills for the first six months should be paid from the initial capital. A business can never thrive without a constant cash flow.

3. Find a good location

Getting a good location for your business is very important as it is through this that you will reach your clients. Imagine opening a cold drink shop in a very cold area where people usually prefer tea or Coffee? This wouldn’t be a right location. A well researched location is very important and this can only be found when a well planned market research has been carried out.

4. Know how to manage your inventory

Inventory refers to the list of goods or stock available and failure to manage this properly can lead to failure in business. Even small businesses need to employ clerks or inventory Mangers who will ensure the list of stock is constantly updated. This also means that the Manager will have an idea of how much stock is damaged or being lost every month. Such a set-up could save an entrepreneur a lot of money prevent imminent failure.

5. Learn how to manage credit

Most entrepreneurs rely on credit to start their businesses but it is also for this reason that most of them fail. In fact, research has shown that many entrepreneurs start their businesses to help themselves get out of debt but many end up in more debt and fail. A good knowledge about how to manage credit is very important and this should help the entrepreneur develop a better repayment program. The entrepreneur should also invest in bookkeeping or a bookkeeper who will then manage the small business’ account books.

6. Master your competition

Any entrepreneur who runs a business without competition is headed for failure. The competition promotes innovation when carefully mastered. An entrepreneur needs to carry out a market research before embarking on any business and with this research should know who his competitors are. There is a difference between a business rival and a competition. If you do your research well, you could make sure that the relationship between your competitors is conducive.

7. Get yourself a good lawyer

Lawyers may not have all the answers but it is important for a business whether large or small to have a good lawyer. Yes, legal advice is very expensive but it is worth it. Entrepreneurs have to notion that a lawyer should only be available when they find themselves on the wrong side of the law. A lawyer can help by giving a business good direction especially if he understands business law. He may also assist in writing up contracts which can be used when transacting with other businesses. The lawyer may also double as your human resource organizer because most business failures also come from failure to manage employees.

8. Have a business plan and follow it

Entrepreneurs usually acquire or write up business plans when they are just starting their businesses. The question is, how many of those entrepreneurs really follow their businesses? A business plan should not just be a tool to assist you to get a loan or other form of financing but it should be used as an action plan. If it is well written, entrepreneurs can follow their business plans step by step. It is a route man for business success.

9. Become part of your community

Gone are the days when Entrepreneurs were seen moving around their community and getting to know their customers. A great entrepreneur knows his community very well and ensures that he interacts with the people. It is not just enough walking around your community and meeting people but become but the community and offer solutions. Your business should have some social responsibility that makes you to give back to the community. When you do this, your community will do business with you knowing that they are also investing in your community.

10. Learn how and where to gather information

The adage that “Information is power” is very true for entrepreneurs. Without a good education, it is very difficult if not impossible to run a business. Now if for some reason you are not educated, you can still be successful if you know where to get your information. Today, the internet has millions of sites that can provide you with all the information you need about any topic. If you want information about babies, dogs, needles, jets or sweets, it is all here. Try it, do you know what “egusi” is? You may not but if you go to google and type in “Egusi” and search, you will get all the information you need. We earlier looked at Business information and the same system may be used. It is however not important just to rely on the internet but interact with the right people and continue getting information.