Have you always wanted to start your own business? Has all this time in quarantine gotten your juices flowing and now you have an idea you want to put out into the world? Here are some things to know before starting your very own business.
1. You need capital
Every business needs capital to get going. There is no way around it. Whether it ends up being from an investor who believes in what you are selling, or through a small business loan, you need funding to open up a business. Be aware that when you borrow money you will get reviewed on your tradeline. What is a tradeline? According to ShareAble for Hires, a tradeline is “consumer accounts, including credit accounts or lines of credit.” If your credit isn’t great, then consider getting a co-signer to help apply or just borrowing cash from friends or family.
2. Marketing is essential
The only way to have a successful business is to have customers, and you get customers with good marketing. That doesn’t only mean garish TV ads or pop-ups on websites. Good marketing can be done with word of mouth, posting interesting content on social media platforms, or a great website. If you are a local store, maybe all you need is a good sign or some delicious-smelling food wafting out of your kitchen. When making your budget, the U.S. Small Business Administration recommends that small businesses should allocate 7 to 8 percent of their revenues to marketing.
3. Reputation matters
Marketing is the way to attract customers, but the way to keep customers is with a sterling reputation. People don’t buy or consume products anymore without looking at reviews or hearing positive word of mouth. There are just too many options on the market to waste time or money on a company that has a poor reputation. That is why managing your online reputation is one of the most important things you can do as a small business owner. When engaging with online reviews here are several tips:
- Always Respond – It doesn’t matter if it is a 5-star review or a 1-star review, always respond so that your customers know that you are paying attention to them.
- Respond quickly – Don’t wait too long to respond to reviews. Not only will it boost customer engagement, but you may find problems that should be dealt with right away. Only responding once a month ads another barrier between you and your customers.
- Respond Politely – A polite response is necessary for any review, no matter how bad. Other people interested in your business will see your responses and will take note in how professional you are. Bad reviews happen to every company, but good customer service is always important.
4. It’s hard work
Owning a business is hard work. The buck stops with you. There is nobody who can take the blame if something goes wrong. There is no one higher up, and if you fail, that’s it, you are done. To succeed, you will be putting in more hours than anyone else. You won’t get time off, you won’t get tons of vacation time. Your blood, sweat, and tears will go into this until it gets off the ground, and even then won’t be able to let up. It can be rewarding to be your own boss, but that means that you have all the responsibility as well.
5. Be prepared to fail
More businesses fail than succeed. According to the US Bureau of Labor, 20% fail in the first year, 50% fail by year 5, and 66% by the 10th year. A failure of your business doesn’t reflect on you as a person. Just because the business failed, doesn’t mean that you are a failure, it just means that you haven’t succeeded yet.
Why do companies fail? Several of the most common reasons include:
- There wasn’t a market for the product or service offered
- Cash flow issues
- Employee issues
- Poor marketing
- Legal challenges
Take some of these factors into consideration when starting your own business and learn from their mistakes.
Keep aware of these 5 things to know before you start your own business and you should be better prepared to succeed where others have failed.