Anyone who has started a business has heard about the high rate of failure in entrepreneurship. Not many businesses make it beyond a few years. There are three important things that small businesses often lack, which could make a difference between success and failure.
1. Business Plan
Businesses without written business plans usually fail whether in one year or three years. It’s not sufficient to have a general idea of your business plan committed to memory. The human memory isn’t reliable. Other reasons you should have an official business plan written is you can consult it when making decisions, it keeps you focused and on track to reaching business goals and it helps persuade investors.
Key sections to outline in your business plan are a company description, an executive summary, target market, marketing, services or products, organization and management, financial projections and funding. You need to research your target market and product or service idea. In order for a business idea to succeed, there needs to be enough demand for it. And you need to be able to fulfill that demand in a way that’s profitable for you or else you’ll go out of business. The majority of your time spent on writing a business plan will be on researching and contemplating.
Cybersecurity issues are sometimes mistakenly believed to be concerns of medium to large businesses. Small businesses can and have been hacked. Any type of business, in any industry and of any size, can be hacked or attacked by malware. This is damaging for a business with limited funds that is trying to gain momentum. It’s equally damaging for small businesses that are in a good place with steady customers.
All businesses lose some customers when data breaches occur. You want security measures in place to decrease the chance of that happening. Also write an emergency plan for what steps you’ll take if a data breach occurs. Know who you will call on to solve the problem. Also know when and how you’ll inform your customers of the data breach. Having a contingency plan greatly reduces your stress.
Endpoint security is an important part of cybersecurity because it helps protects your business’s sensitive data. There are several options in small business endpoint protection software, so you can find an affordable solution. Antivirus and anti-malware scanners aren’t always included in endpoint security software, so you’ll need to make sure you have this software too.
3. Financial Management
Some small business owners don’t like keeping track of income and expenses, but this is damaging enough to take you out of business. If you have no idea what your expenses and income are, then you are driving blindfolded.
Not only do you want to pay your bills on time but you should track your growth as well. When growth slows down or drops off completely, it’s a signal something may have gone wrong. You can take action faster to investigate whether or not you need to adjust your business model or plan.
Most businesses operate at a loss during the beginning stages. Once they reach the break-even point, they usually quickly advance into profitability. Staying on top of your finances will let you know when you finally reach the important milestone of break-even.
The top three things that small businesses lack are cybersecurity, a business plan, and financial management. You can greatly increase your chances of succeeding long-term by making sure you have all three areas covered.