As a young, aspiring entrepreneur you should be aware of the difficulties associated with launching and growing a successful business. Most businesses fail within the first 2 to 5 years due to many reasons. These reasons can include lack of planning, incompetent leadership, lack of exposure, and most importantly, lack of access to capital. Here I will give you three tips to help you increase your chances of starting and growing a successful small business.
- Find Your Niche – Starting a successful business largely depends on you doing something that you are sincerely passionate about. You should also possess the skills needed to operate the business in your industry of choice. Finding your niche (and insuring your niche has a profit center) could be the key to your success. Think long and hard about what it is you want to do, and do your research on the industry before you dive in. Sites like FirstResearch.com and www.IbisWorld.com sell industry reports at reasonable rates. You can even read snippets of each industry report free of charge.
- Develop Your Business Plan – Once you discover your passion and niche, and research your industry, it’s time to begin working on your business plan. Your business plan should thoroughly outline how you plan on competing in the industry of your choice. It should clearly display who you are, what you do, how you plan on doing it, who is your target customer, how you will reach them, how you will convince them to do business with you and how much money you will make from them. Failing to plan before you launch the business is just like asking for a disaster to happen.
- Grow Your Support Network – No one has ever developed a successful business on their own. Therefore it is wise to grow your support network before you are ready to launch the business. I advise you to connect with people in your industry who are already established and offer a product or service complimentary to your own. The best (and fastest way) to grow your new business is to connect with people who are already successful and have a stable and consistent customer or client base. These types of people may be able to refer people to you, helping you gain new customers or clients quickly, and therefore generating revenue for the business as soon after you launch.
Keep This in Mind if You Think You’ll Need a Small Business Loan
One major component of being able to start and grow a successful business (for a lot of people) is having adequate access to capital. Lack of access to capital is often a major problem for small business owners. This problem has been recognized by national organizations that support small business such as the Small Business Administration and the National Small Business Association. Programs have been put in place to combat the problem.
As a young and aspiring entrepreneur it’s important to know that when you first start out, obtaining capital will largely depend on your personal credit history and score. There are other ways to fund a business that do not require a personal credit history and score (such as loans from friends and family or venture capital), but your chances of obtaining that type of financing can be slim. Obtaining financing from a bank or lender as a startup business owner is more realistic.
That is why it’s important that you try to maintain a stellar personal credit history so you will have an easy time qualifying for a small business loan. The best way to build and maintain a good personal credit history is to open a few new credit accounts (if you don’t have any already) and make timely payments on those accounts. This can include obtaining a small credit card that you use to pay for gas and groceries (and know you will have the funds to pay back). Making timely payments on your credit accounts over at least a 3 to 5 year period will increase your chances of being able to qualify for a small business loan.