From concept origination to the first sale, starting up your own business is not to be taken lightly. More than half of new businesses fail in the first year, and with so many variables that could cause a collapse, it’s hardly surprising. If you were to start a new business, the first thing to consider is the market demand for your product or service, and with many competitors, can you grab a big enough share to survive?
It is critical to develop a strategy to market your product, and in the modern business world, digital marketing is essential. All businesses require a strong online presence, if they are to secure a share of the market. A product or service could be perfect, yet without the right marketing, it will never get off the ground, therefore, a sound marketing plan is essential if you are to survive.
The right insurance
Lack of insurance causes many small businesses to close down. If, for example, a member of the public was injured while carrying out work, and the company did not have public liability insurance (PLI), then the claim could be so high, that the business is forced to liquidate. To optimise the chances of success, an entrepreneur must eliminate the risks, and having the right insurance protects you against accident and injury damage to third parties. TrustATrader Insurance offers PLI to small businesses, as well as vehicle insurance.
This is one variable the business person has no control over, and the economy certainly does have an effect on your trading, so timing is important. A business launch during an economic depression might not be the best idea, depending of course, on what the product or service was. If it were a necessary item, such as food or clothing, and the prices were right, then the economic downturn could have a positive effect on sales. Luxury goods, on the other hand, would not be popular at that time, as consumers would have less money to spend.
Lack of capital
A business can run out of capital, and if it is unable to secure a business loan, or an overdraft from the bank, it would inevitably have to cease trading. An essential part of the initial business plan would cover finances, and it is recommended to have sufficient funds to manage the business for 6 months, without receiving any income. You should also take out comprehensive insurance to cover fire, stock damage, or any situation that might result in loss of revenue.
The business plan
This document is the result of a lot of planning, and will help the entrepreneur to fully understand the nature of the business, and with the right planning, certain risks can be eliminated, increasing the chances of success.
If you are thinking of becoming your own boss, and have the right product to offer the consumer, then make sure you cover all the risk areas, and hopefully, your business will provide for you and your family for generations to come.