Being born in or moving to America means you can pursue the American dream of owning a business. But are you sure you’re ready for it?
Most people don’t realize how much work goes into starting a business, or more importantly, what it takes to make it successful. New entrepreneurs shouldn’t be discouraged from starting new business ventures because it helps our economy thrive. However, there are a few things they should know before taking the leap.
Your Success Isn’t Guaranteed
One of the most important things to know about owning a business is that your success isn’t guaranteed, nor is there a safety net. Nearly half of all small businesses fail by their fifth year. Statistically, that gives you a 50 percent chance of success.
Don’t just look at these numbers and think “this will never happen to me,” because the truth is, it could. You may have a brilliant and unique business idea, but if you don’t know how to operate a successful business, it doesn’t mean anything. Your success depends on your willingness to learn, grow, and work hard to ensure the future of your business.
Before setting out in the world of entrepreneurship, it’s important to take time to evaluate yourself. If going home every day before 5 pm and having long weekends to yourself are more important than going the extra mile, owning a business may not suit you. Ask yourself the following questions:
- How’s your work ethic?
- Are you willing to work hard for little pay (at least at first)?
- What are your talents?
- What are your strengths?
- What are your weaknesses?
- Can you work well with others?
- Can you lead and inspire?
- How committed are you to make your business successful?
It’s important to answer the above questions with ruthless and objective honesty. The answers will help you determine where your weak points are and how to overcome them.
Know the Industry
Next, it’s important to understand the industry you’re getting ready to base your future on. Is it growing or in decline? Is there room for growth in your community, or is the market saturated with the competition?
Take a look at your most successful competitors to see what they’re doing right. Also, look up online reviews and testimonials to see what their customers have to say about their products or services. Are they lacking something that you can deliver on?
Know Your Target Audience
Owning a business means taking your lumps when they come to you. For many business owners, this means embracing the hard truth that your target customer isn’t everyone walking around on the street. The majority of the people in your community probably won’t care you exist.
However, that’s why it’s so incredibly important to know how to target the right audience, rather than wasting your time, money, and resources on “deaf ears.”
Keep Track of Your Expenses From Day One
One of the biggest mistakes people make personally and professionally is not tracking their finances. In fact, 78 percent of American workers live paycheck to paycheck, finding their bank accounts empty at the end of the month.
As a business owner, you can’t afford to make this mistake or you won’t be able to pay yourself or your employees. Knowing exactly what your costs are and where you’re spending money can help cut back on unnecessary spending. Keep track of every penny your business spends starting on day one.
Organize your expenses in a spreadsheet, keeping separate categories for the following:
- Employee payroll/benefits
- Building costs (rent, utilities, amenities, CAMs)
- Vehicle costs (company vehicles, fuel, maintenance)
- Travel expenses
- Business-related food expenses
- Equipment, materials, supplies
- Professional services (contractors, IT, etc.)
- Insurance (building, business, worker’s comp, vehicles)
Effective Marketing Can Be Expensive
Owning a successful business often requires putting a lot of time, money, and effort into advertising. While there are some platforms in which you can get away with free or organic advertising, most successful marketing strategies require an investment.
However, you’ll learn quickly that paid advertising methods often come with additional perks. For example, using Facebook paid marketing allows you to dictate exactly how much money you spend each day and what demographic of people you want to be targeted (age, gender, location, and more). It also comes with analytics, showing you how your ads perform in terms of engagement (likes, shares, comments, link clicks, etc.).
You Shouldn’t Do This Alone
Between the stress, long hours, and personal investment, owning a business can make you feel isolated. However, most successful business owners know that a solid team is necessary to make things work. This could mean hiring a sales manager, a marketing consultant, an accountant, or using a company to create pay stubs.
However, you should also consider establishing a board of advisors. A board can consist of other business owners, trusted friends, family members, co-owners, etc. The idea is to use the collective wisdom of the group for the betterment of your business.
You’re Not Always Right, But Neither Is the Customer
When owning a business, it’s inevitable that you’re going to screw up. You may screw up a client’s order, say the wrong thing to the wrong person, etc. However, you should also know that the old adage the states “the customer is always right” isn’t necessarily true.
But because you depend on customers to keep your business thriving, this sometimes means setting pride and ego aside and apologizing for something that wasn’t your fault. There will come a time when you need to embrace that some people can never be satisfied.
Self-Care Is Vital to Longevity
Finally, if you haven’t picked up on it already, owning a business can be stressful. In order for you to be of any use to your business, your employees, or your customers, you need to invest in self-care.
This could mean taking time every morning to meditate, focusing on your physical health, taking small vacations where you can, and spending valuable time with loved ones.
Looking for More Insight on Owning a Business?
Owning a business isn’t for the faint-hearted. But remember, no one said you had to do it alone. Be sure to check out some of our other articles before you go for more information and advice on owning a business as well as updates on new products and services that may benefit your company.