Starting a business is a big endeavor, and not everyone succeeds. However, certain factors can make your business stronger and less vulnerable to market forces.
Location Is Crucial
Whether your business involves a product or a service, choosing the right location can mean the difference between success and failure. Visibility and accessibility are two key factors that drive people towards your business. Opt for places with good foot traffic, but make sure you won’t sink your business with the overhead costs. You’ll also need to make sure your product/service fits the community. A high-end restaurant won’t get customers in a low-income district. It’s better to open a diner or a food truck.
Security should also be one of your primary concerns. Although insurance can cover incidents of theft, looting, or vandalism, your business will still take significant financial damage if operations are stopped due to damage or inventories are lost. The state you’re in can also determine your expected revenues. Places like Denver and Salt Lake City impose corporate income taxes of 5 percent or less of a company’s taxable income. Houston imposes no taxes at all, although you will need to shoulder a franchise tax (of around 5-6 percent) if your earnings surpass $1.2 million.
Planning and Management
Almost half of all new businesses end up in failure. Most of these were started on a whim and didn’t have sufficient research and planning. Proper management is crucial for every business. Pricing and profit margins must be set to balance overhead costs. Employee wages and benefits must be adequate. Otherwise, you’ll face a revolving door of employees who need constant training.
If you’re not confident of your management skills, you can partner up with an established brand through a franchise. You can learn from others’ success and then use that knowledge once you’re ready to start your own business. Of course, managing a business doesn’t mean doing everything on your own. While the urge to control everything might seem overwhelming at the start, delegating tasks will make your business run more smoothly and keep your stress levels in check.
Covering Your Bases
The first few years of your business are the most vulnerable. Get through the birthing pains by having a solid plan and keeping extensive records of your business dealings. You might want to get your business an accountant or two to handle your taxes. Most small businesses end up paying more than they should when they do their taxes on their own.
You’ll also need a lawyer, preferably one specializing in business — to handle the legalities and documentation required to start/run your business. Keep in mind that the first few personnel you hire — especially management staff — will be the lifeblood of your business. Cultivate loyalty, but don’t hesitate to punish any wrongdoings that could harm your operation.
Every business has a chance of succeeding. Of course, you can ensure that success with rigorous planning, excellent management, and a meticulous understanding of the policies and laws that govern your business.