Lets face it: Two-thirds of all small businesses won't survive the first three years. A tragedy? I wouldn't say so because most small businesses fail for a reason.
Often small business owners just don't prepare themselves good enough or even stumble ahead without any preparation.
Because I am a real advocate of small businesses and don't want that you fail with your small business I have prepared a small list of things you - as a small business owner - should keep in mind.
First: Money is not everything but still important
Well currently there are really tons of people who are searching for a small business idea that fits in the budget range of just a few dollars.
I love the idea of business ideas that aren't expensive and mostly require time, intelligence and sweat. But still most small business owners forget that they can't survive without cash.
It's one thing if your business idea does just cost $100. But starting your business with just hundred bucks would be quite stupid. Why you ask me?
Most small businesses have what I would call a startup time. Before your business can cover your living expenses (like mortgage, groceries and so on) you will always face some dire months or even months where your business makes a loss.
Don't be scared! This is completely normal. But most small business first timers forget that they also have a family or a mortgage or a car to maintain. So before you start a small business you should have at least savings to cover twelve months of living expenses.
Read it again! I said at least twelve months. And this money should only be used for living expenses and not for business expenses.
If you need additional funds for your business add these to the twelve month survival funds.
Second: Don't overestimate your skills
Often new small business owners definitely overestimate their skills. How do I mean that? Well if you worked your whole live as a real estate agent don't try to start a coal delivery business!
I don't necessary mean that you don't have the experience to start a small business just that you should avoid to start a small business that is completely different to what you did the last twenty years.
Worked as a brick layer and now want to open a lumberjacking business? Well this would be a great example of what you shouldn't do.
Before you go in the logging business - for example - get some experience as logging worker or logging project manager!
Always remember that the less experience you have in the business you've choosen the more obstacles will you face and the more often will you fail. And if there is one thing that really kills most small businesses in the first three years than it's obstacles and failure.
I mean every fail does cost you money. May it be a lost client or something more fatal like that you bought an useless machine for thousands of dollars for your small business.
Well that were my two thoughts about what small business owners should know before they go into business. I hope you avoid these two mistakes and wish you and your small business all the best!
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