Advertisement

4 Ways to Keep Your New Business From Failing

May 25, 2023

According to the U.S. Small Business Administration, roughly a third of new U.S. businesses fail in their first year, and only half are still in business after five years. Possible reasons for the failure rate include cash flow problems, ineffective marketing, and an entrepreneur’s own fears about succeeding.

“We need to discuss ways to reduce this staggeringly high number,” Michael Wilson, AFFLINK senior vice president of business development, said regarding the topic. “Fortunately, it is doable.”

Wilson offered the following four suggestions to help prevent a business from failing in its first year.

1. Have a business plan. According to the Harvard Business Review, entrepreneurs with a formal strategy are 16% more likely to succeed. Rather than seeing a business plan as a burden, view it instead as a road map to successfully growing and retaining your business.

2. Master money management. Entrepreneurs must focus on how much money is coming in and how much is going out, if they want their company to be successful. From the get-go, they should have a cash reserve of at least three to six months for operating expenses, in order to weather any possible downturns.

3. Monitor employee performance. To properly evaluate employee performance, set clear goals in writing regarding what is expected of each employee in every position. Invest in employee training and development, and conduct regular employee evaluations. These evaluations will further help the owner and management better understand how to monitor employee performance.

4. Keep your eyes on the future. Many new entrepreneurs just focus on daily tasks and putting out fires. Doing so could cause them to miss opportunities.

“We can list other reasons why new businesses fail,” added Wilson. “But invariably, it comes down to a lack of planning. To survive, have a plan and focus on the future.”

Tags

Latest Articles

Add Beauty to Your Facility With Natural Stone Floors
May 22, 2024 Kathleen Misovic

Add Beauty to Your Facility With Natural Stone Floors

May 20, 2024 Jeff Cross

FTC’s Noncompete Clause Ban: Revolutionary Move, a Mere Clarification, or Just a Dud?

May 20, 2024 Ronnie Phillips

Are Your Facility’s Restrooms Baby Boomer Friendly?

Sponsored Articles

Gym Owner Discovers a New Battery Can Make a Big Difference
May 16, 2024 Sponsored by U.S. BATTERY

Gym Owner Discovers a New Battery Can Make a Big Difference

May 16, 2024 Sponsored by TENNANT COMPANY

Illinois BSC Optimizes Labor With T7AMR Robotic Floor Scrubbers

May 16, 2024 Sponsored by TENNANT COMPANY/ORBIO 

FlagShip Facility Services Takes Flight With Robotic Floor Scrubbers

Recent News

flu testing

CDC Wants Increased Flu Testing This Summer

IICRC Releases Revised Mold Remediation Standard

Hazard Communication Standard Update Improves Chemical Labelling