As business cycles go on, many businesses seek financing to continue or grow their operation. While this is a common approach for new business, it’s also common for established business to seek advances to remain profitable. Whether it’s because of unexpected expenses, expansion costs, or changing consumer preferences, many small business owners wonder if a loan is the right answer. Before you seek finance, ask yourself a few questions: Are my resources (time, money, talent, etc.) already available to take the business to the next level?
You can most successfully open a new business during good economic times. This means that your resources are available such as time, money, talent, etc. to properly start your business. If you don’t have these resources, start small. Then ask others, friends, or experts to review your business strategy before you seek finance.
The third primary reason small businesses fail is because they do not have a business plan. The failure to have a business plan is like not having a buyer’s remorse. Without a business plan, entrepreneurs have no way of determining whether or not to pursue funding. The best time to have one is when you’re starting your business from scratch, preferably in its infancy.
After you’ve developed your business idea, you must determine your marketing strategy platforms. This is important because marketing and business strategies will determine the longevity of your businesses. Marketing is what draws in customers and drives sales. Many businesses start small, then expand once their markets are saturated. For those who started small, it’s important to determine the market you’re looking to fill before seeking outside capital.
Finally, statistics show that new businesses fail within five years. This doesn’t count the fact that many new businesses fail within one year as well. Statistically, one out of every twenty businesses doesn’t make it past one year. That’s bad news because the failure rate has been steadily rising. It’s almost as though more companies are choosing to go with the online business model instead of trying to build a traditional brick and mortar operations. There are many reasons for this trend, but one of the top reasons is that so few have the resources to hire a full time staff.
When you think about the different ways you can launch a small business, the options expand dramatically. You could choose to start from scratch or you could use an existing company as your starting point. Most business owners start with the online model because the startup costs are the lowest. Even with limited funding, many online-based businesses have made a lot of money. However, small business statistics show that most of these online businesses were able to expand their business by taking advantage of technology.
The fact is that online businesses aren’t limited to a certain geographic area or even a specific industry. Some of the biggest stars in the online world are from small towns all over the United States. While some people may balk at the idea of launching an online business from a small town, small business statistics show that the success rate when done correctly can be very high. In fact, many successful online entrepreneurs started small before branching out into the online world later on. The same is true of celebrities who also own small businesses online such as Jimmy Page and Sir Paul McCartney.
So, while the online world is extremely competitive, it offers incredible opportunities to small businesses. You don’t have to have massive numbers of employees or have years of experience. Many of the best small businesses in the world started as individuals with just a few thousand dollars to spare. And with the right resources, they began to build a business that eventually grew into massive companies. But in order to succeed, you need to make sure that your business is equipped with the tools and resources that will allow it to be a success.