It is no secret that nine out of ten start-ups fail—that’s a full 90% of businesses that do not become profitable or are derailed for one reason or another. So what can you, as a prospective business owner, do to ensure you are one of the success stories?
Starting a business can seem daunting, even to experienced entrepreneurs. It is not an endeavor well-suited to procrastinators or those on the verge of retirement. Managing a start-up business is hard work–often requiring short-term (and sometimes long-term) sacrifice of other needs and desires, a high tolerance for risk, a continuing commitment of time and money, and perhaps most importantly, planning. While there are many paths to success when starting a business, the following concepts are nearly universal to every successful new business.
Starting Your Business – Planning for Success
Our business lawyers often hear from potential clients who believe they have a great idea for a new business. However, upon inquiry, it sometimes becomes apparent they haven’t asked themselves the hard questions which are necessary to develop a sound business plan—a plan for success.
The questions which should be asked early on in the process can seem nearly endless: Who is my target market? Where are they located? What are their priorities and preferences with regard to my products or services?
- Why will customers want to buy my products or services?
- How should I price my products or services?
- Will I offer a broad range of products or services or target a niche market with a more limited menu?
- How will I generate interest in my products/services?
- How much of an investment is needed before the business becomes profitable?
- What form of business entity will I need?
- How do I avoid potential legal problems which could lead to the failure of my business?
Successful business owners don’t just wake up one day, decide to start a new company and have a thriving business the next. It takes weeks, months, and sometimes years of planning to achieve success. If you don’t know where to start, it is critical to reach out for assistance from those with the knowledge you need. There are many resources in San Diego and throughout California to support prospective business owners. SCORE is one of many such resources which our business lawyers have suggested our clients connect with for assistance. SCORE is a nonprofit organization which is supported by the U.S. Small Business Association (“SBA”) and is affiliated with seasoned professionals who are committed to mentoring prospective and small business owners in many facets of their business, including critical planning. This program has been in existence for over 50 years and has proven invaluable for many new entrepreneurs in a variety of industries. Click here for more information about SCORE.
Also important in the planning phase is to consult with a knowledgeable business attorney and tax accountant to ensure your plan includes elements which provide the best legal protection and tax advantages to you and your new business. You don’t want to be that client who waits until a lawsuit has been filed or your bank accounts have been levied by the Internal Revenue Service before contacting these professionals. Few things can derail a small business faster than costly legal or tax issues, so educate yourself and plan ahead.
Implementing Your Business Plan
Once you have your business plan in place and are ready to begin implementing it, it is critical to remember that PLANS CHANGE. While a business plan is a very useful tool, like a roadmap, getting to your destination rarely goes precisely as planned. No matter how much planning comes before that first leg of your trip, there are often unforeseen obstacles that require a new business owner to refine their strategies as the business plan is implemented.
Nothing is stagnant—markets are not stagnant, laws are not stagnant, even the needs of employees and customers are not stagnant. Therefore, the flexibility to deviate from your plan is essential for success. Having a sound plan in the first place will set you on a firm path to success, but remaining flexible to refine your plan, along with hard work and dedication, will all but ensure you will get there.
We hope you have found this article informative. Whether you are in the planning, implementing, or growth stage of your business, the experienced and trusted business lawyers at Gehres Law Group are here to keep you on the path to success. We are committed to supporting small and start-up businesses throughout California. Call or write us today. You’ll be glad you did.