If you have the know how to make a small business work, it can be the most fulfilling decision you ever make. You can set your own work hours, scale your own profits, and have a chance to change your industry. Successful small business owners create a legacy that’s passed down through their families to run for generation to generation. That said, you have to do it right. About one in every five startups shuts its doors within just a year. Only about a third of companies are able to make it past the first decade of operation. There are a lot of factors at play here. Inexperience and lack of knowledge are major issues. If you don’t know how to research your industry and create a business that thrives in your market, you won’t be able to stand out from the competition.
Business Degrees Make a Difference
Now, it’s true that some entrepreneurial startups are underdog success stories. But statistically speaking, you’re more likely to have a successful business if you have a business background. If you want to learn about economics, supply and demand, marketing, different market sectors, and how to define your niche, then you’ll want to pursue higher education. Your business isn’t going to become a wild success story overnight. It will take time, effort, and hard work before you see any payoff. If you’re just looking for quick cash, a startup might not be the right choice for you. If you’re interested in pursuing a degree in business, you might look into student loan options. Private lenders offer contracts with clear terms regarding interest and expectations. With this site, you can use a student loan calculator to determine how much you’d need to pay back after you graduate.
The Passion Needs to Be There
Why do small businesses fail? A lot of the time, it’s because people start businesses without having a good reason. You might want to own a successful small business, but do you actually care about the work? Or do you just want the success and the money? Money isn’t the only bad reason to start a small business. Some people start businesses because they want to work from home, set their own hours, or have extra time with their families. While these are all understandable goals, they really have nothing to do with the business itself. If you want to build a successful company, you need to have these key factors:
- You are passionate about the business and you have a true belief that your business is different and it fills a need in your industry.
- You are patient enough to wait through long hours of work with no instant gratification.
- You learn just as much from your mistakes as your successes, and you’re constantly ready to recalibrate to fix your failures.
- You naturally lead when creative problem solving is needed, and you’re happy to work and plan independently.
- You have enough integrity and people skills to get along with people from all walks of life, even those who might be rude or off-putting.
You Have to Know Your Market
Supply and demand are the first lesson you learn in Economics 101. But it’s easy for business owners to get caught up in the splendor of their idea. Maybe you have an idea for an innovation that you’re sure could change the world. Maybe you have a product or service that only you can create. But who is going to buy it? Is there an actual need for the service or the product you’re offering? Will your business enact real change? Are you solving a problem that exists? Are there already other easier solutions to that problem? Before you ever sink money into your business, you need to identify your market. And you need to be sure that that market is large enough to turn a profit.
You cannot create a business that markets to everyone. Instead, your market is a group of consumers that you’ll be able to contact using your networking and marketing resources. Is this market interested in your product? Even if you have a market when you start out, that can change quickly. It’s important to keep tabs on your consumers’ needs, their desires, and what the competition is offering. The most successful businesses are the first to solve customer pain points.
You Have to Be a Good Manager
Being your own boss means that you can clock in whenever you want, set your own schedule, and make your own pay. But it also means that you’re in charge of being your own manager. And poor management is one of the top reasons that small businesses fail. Have you ever owned a business before? What do you know about running one? What prior experience do you have with things like purchasing, production, hiring, and financial management?
This is an area where a business degree can be very helpful. You get the tools and the know-how to run your own show. But there’s also hands-on learning that you can’t get sitting behind a desk. If you want to keep track of inventory, organize your purchase orders, track your tax payments, and manage your client relationship database, you’ll have to learn as you go. Some people have prior experience from working in a parent or grandparent’s store. Some people are learning along the way. If you can’t identify your weaknesses and correct them right away, you’re going to run into trouble.
You don’t have to be a perfect manager with every single aspect of running your business. You can outsource if need be. Understanding both your strengths and weaknesses means that you have the power to address them. Poor management isn’t always the result of inexperience and disorganization, either. Sometimes business owners simply fail to pay attention. The market is constantly changing. You need to stay on your toes. If your business isn’t evolving to meet the changing needs of your clientele, then you’ll lose out to the competition that actually does their research.