Sometimes it seems to be a mystery why some businesses succeed while others, which looked equally promising, fail. Some things are completely out of a business owner’s control, such as natural disaster or an abrupt change in the market that was completely unforeseeable.
There are, however, some things which can be controlled and prepared for and they can make the difference between a business that survives and thrives, and a business that doesn’t make it into the next fiscal year.
Here are four specific things every business needs in order to succeed.
1. Every Business Needs a Plan
Once there is a decision to open a business, there needs to be an evaluation. What are the resources available? Who is going to be involved? How much time is it going to take to get off the ground? There needs to be a plan before even getting started as to how much will be charged and where the business will be located.
Most businesses fail within five years, so it is also imperative to think into the future. How much profit is expected? How long can the business operate reasonably without turning a real profit, while building a customer base and becoming well known as a reputable, ongoing concern? Planning will also allow a new business owner to relax when not becoming a millionaire overnight, as a reasonable plan will allow for time to grow.
2. Offer Something That’s in Demand
Every business must fulfill a need, either something other people can’t do without or that they can’t get anywhere else. If the business sells goods, it must offer a product where there is an ongoing need. Maybe a successful business could offer a needed product at a better price or make with superior materials. If the business product is a service, the service must be skillful, reliable and reasonably priced. If the need isn’t there, the business won’t even get off the ground.
3. Each Business Should Acquire Insurance
The type of insurance depends on the type of business, and some kinds of businesses require only general liability insurance. If there are employees, there is a need for Employers Liability Insurance. But in any trade, it is especially important to have special insurance protecting the business against claims.
Because of the nature of tradesman occupations, there are always risks not just of imperfect products, but accidents. A simple job could turn into a big disaster when a completely unrelated part breaks and injures not only a worker but a customer. Thankfully, insurance covers a wide variety of tradesmen, from florists, to drain cleaners, to computer repairmen. Policies typically last a year, and coverage includes legal expenses incurred while defending relevant prosecutions, defective premises, and even personal belongings.
Protecting the business leaves the business operator alone to do the important work without worrying about extra problems.
4. All Businesses Need Proper Licensing
Wherever the business is located, there will be both local and federal rules governing the business itself and the workers. Every business must first be registered as a sole trader, partnership or limited liability. There might be a need for a tax license, in order to collect the sales tax on each sale.
There are special licenses for almost everything a business might want to do, such as providing credit to customers, parking vehicles in a controlled zone, or using CCTV equipment. It is important to be prepared with all proper licenses ahead of time to start off on the right foot with the local authorities.
Before you set up your own business, ensure you have the above 4 points covered.
Category: Startup Basics