The United States Bureau of Labor Statistics most recent data from 2021 states that 20% of all businesses fail during their first two years of operation, 45% close their doors within five years, and 65% within ten years.
The agency reports that only 25% make it 15 years and beyond.
So, what’s the trick? How can you better ensure that your business is part of the small percentage that makes it and not part of the greater majority that fails? The following are three tried and true methods that help start you off on the road to a successful business endeavor.
#1: Proper due diligence before starting goes a long way toward future success
Take some time to look at your target market and make sure your product or service is not already overrepresented. Put together a business strategy that includes branding and a marketing plan as well as a clear vision. Knowing the business’ intended audience and goals can help to better ensure you build and maintain credibility within your target market and build a strong foundation for future growth.
#2: Prepare for a big commitment
Some look to start a business thinking it will be easier to be their own boss, others look at it and think of the process as analogous in commitment to having a child. Although in many ways both are true, it is important to know that the time commitment is often more akin to parenthood.
A new business requires huge dedication. If you hope to transition into something less time consuming than a traditional “9 to 5” gig, starting a business is generally not the best option.
#3: Get paperwork in order
Business documents will vary depending on the chosen structure, but generally include a business plan and by-laws or company agreement. Additional documents should include financial records and employment contracts if you plan to have workers.
Taking these three steps before you open your business will help set you up for success. These tips and continued diligence will increase your odds of joining that top fourth that are open for 15 years or more.