According to several small business resources, each year only 66% of small businesses and start-ups will survive two years, and about 45% of them will survive at least 5 years. As evident by this information, the failure rate for new businesses is pretty significant. To put it into a simpler perspective, your business has a 50/50 chance of survival. That’s a flip of the coin.

Don’t become a statistic and better your odds of success by avoiding the common mistakes of entrepreneurship:

Start your business for the RIGHT reasons.

It’s too often that I hear about people looking to start a business because they A) can set their own hours, B) want to make a TON of money, and C) don’t have to answer to “the man”. Now it’s not that these reasons are horrible, but if they are your ONLY reason for wanting your own business then therein lies your issue.

Ask yourself the following questions:

1) Do you have an undeniable passion for what it is you want to do?
This seems like a pretty straightforward question. Whether it’s about the product or service you wish to provide, you SHOULD love what you do.

2) Do you strongly believe, based off market research and investigation, that your product or service will be fulfilling a REAL need?
Just because you have a good idea doesn’t mean that it’s going to be successful. Before starting a business, you must do the necessary research to understand your start-up and operating costs, marketing, competition, the value of your service, etc…

3) Can you handle significant challenges? Can you handle failure?
Regardless of how much planning or research you do, mistakes are going to happen. They may or may not be your fault, but the thing to concern yourself with here is how you can handle the situation.

4) Can you work independently and hold yourself accountable for ALL facets of the business?
YOU are the boss and you can’t point fingers at anyone else.  Even if you have business partners, everyone shares an equal amount of blame if one person fails to perform their respective duties.

Acquire the Necessary Management Skills and/or Resources

What can or can’t you do? Assess your management skills and identify your strengths and weaknesses. This will help you to determine what areas need improvement or where you may need to request outside help. Realistically, there is no way for you to be able to handle all managerial duties like sales, finance, marketing, human resources, etc… Neglecting any area can have dire consequences and typically leads to failure.

Do you have enough money to sustain your business?

It’s rare to quickly make a profit within the first couple of years of opening. On average, businesses do not come out of the red until their 3rd year. It’s essential to your success that you understand how much it will cost to start your business, how much it will take to maintain your operations, and how long it may be until you see a profit.

“Business plan? We don’t need no stinking business plan.”

Ah, famous last words for many small business owners. Starting a business without properly planning is like skydiving without first checking your chute. Why take that risk? It’s critical for you to strategically plan and address various components. These components may include:

Description of your business, mission, goals, and keys to success

Determine the correct business type: Sole Proprietorship, C Corp, S Corp, or LLC

SWOT Analysis – strength, weaknesses, opportunities, and threats

Finance – start-up, operating, forecasts

Market Analysis – Competition, target audience, demographics

Marketing/PR – Advertising, Public Image, Brand Identity

Human Resources – Personnel needs, insurance, benefits

Branding ©

Another important item that is overlooked is your brand identity. Your brand is the physical and emotional experience that your clients, customers, and prospects have with your business. It’s a direct representation of your organization’s personality and values. In addition to the visual components (logo, colors, print materials, website, etc…), it also includes the daily interactions with your target market:

Physical Environment (location, furniture, etc…)

Copy and written content

Employee/customer interaction

Does your brand send the right message? Do you have clearly defined polices on how to use your logo or interact with clients? Developing a clear and concise brand strategy will help you to better connect with clients, prospects, and vendors, and separate you from the competition.

There is NO secret ingredient.

The secret sauce to any successful business is you, the owner. Do not accept failure, learn from your mistakes, proceed with an open-mind, and forever-grow. »