It’s a cold hard fact that according to the Government of Canada, only 32% of small businesses with one to four employees survive the first two years. That’s a lot of small businesses coming and going.
The odds are certainly stacked against entrepreneurs from the start. However, if you can make it to five years, the likelihood of continuing to grow your business increases dramatically. Carefully considering your business idea before writing a time consuming business plan is a great way to start on the right foot.
Let’s look at three key ways you can increase the chances of your long-term success, even before you write a business plan.
1. Not Every Idea is a Great One
It’s an uncomfortable truth, but not every small business concept is a good one. This is where the value of doing some basic background research comes in. Before you even set out to put together a business plan and apply for grants or loans for funding, take the time to explore your business idea.
Ask yourself these questions:
- Has it been done before?
- If so, what worked and what didn’t?
- What are some of the hurdles you’ll have to overcome?
- What are some of the barriers in your way?
The better your research is at this stage the easier things will be for you down the road.
2. Plan for Success
It’s very likely that you will lose capital during the early days of your business venture. One of the biggest mistakes you can make when you’re thinking about beginning a business is not being prepared to have enough in the bank to start. You should think about whether you’re going to have the financing to back your business, even before you write a formal plan for your finances.
“Not having a sound financial plan is no different than starting a vacation road trip with no destination in mind,” says Ian Whiting, veteran financial planner , “Wherever you arrive is going to be strictly by accident – and people don’t like accidents.”
And if you’re worried about coming up short, why not look into applying for some of the many grants or loans available to small businesses? Most start-ups require loans, but grants are an additional resource that are often overlooked.
3. Complacency Breeds Contempt
Whether you think you’re going to be using a grant, loan or personal bankroll to finance your business, it’s still essential to write a solid business plan. Even then, getting through the first few years of your business won’t be easy.
The phrase “make or break” is appropriate here because the first few years really will make or break your small business. Even if you’ve researched your great idea and carefully consider your financing options, it may all be for nothing if you don’t work hard to keep it all together.
While passion, perseverance and a well thought-out business concept will take you far, nothing will absolutely guarantee that your business will outlast the first five years. However, just because you don’t do it at first, you can always try again – who knows what success waits for you in the future?
Are you taking advantage of Small Business BC’s wide selection of seminars for entrepreneurs and small to medium-sized business owners? Space is limited, so don’t miss your chance to register today.