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REDDITEvery day, more and more companies are being formed by entrepreneurs all over the world. With the help of the internet, it’s now easier than ever. This has created a wealth of innovation over many industries over the past few decades, but it also means that competition is at its most fierce. Statistics show that around half all business fail within the first few years of operation. Here’s how you can make sure that’s not you.
Analyze the Rest of the Market
Researching and analysing your market is crucial to surviving the difficult early years. You’ll need to first consider if there’s a sustainable market for you services in the industry. Research the average revenue that similar businesses are producing as well as the average price the consumer is willing to pay for goods in the industry. It’s important to try and look at businesses in different stages of development to give yourself a better idea about how your company can expect to do over its development. If the numbers don’t add up, the market may not be ready for your product or service at this time.
When It Comes to Numbers, Think Conservatively
There are many times when you should think radically as a new business owner: finding gaps in the market, new ways to cut costs, and how to innovate all require creativity. However, one area where it pays to be conservative, especially early on, is with the numbers. Overestimating your expenses and underestimating your revenues means you’ll be prepared for the worst possible case scenario. Research has shown that a typical startup’s expenses are around a third more than they originally planned. This means that, even planning conservatively, you likely overspend. This way of thinking will simply minimise the risks.
Take Out the Right Insurance Policies
It’s important to learn early on that insurance isn’t a luxury, it’s a necessity for any SMB owner. Running your own business is stressful enough at the best of times, so don’t put added pressure on yourself by failing to take out adequate cover from companies like Catlin XL from the start. Not only could any damage or potential legal action put a halt to your workflow, but you’ll also risk putting your company in debt to pay off the potentially huge fees that go along with not having the right cover.
While the statistics may seem against you, it’s important to remember that many of these failed endeavors were from easily rectifiable mistakes. Consumers still want quality and innovative products and services. You just have to make sure you’re giving them what they want.
