Here’s the reason why most small businesses fail
One of the main reasons people start a small business is because they’re tired of working for someone else and think that they can do better. And herein lies a problem with many small businesses…
Imagine the situation – you’ve worked for the company for years now and you know that the boss charges customers triple your hourly wage for every job you do. One day you think “hold on, I know how to do the work and I bet I could do it cheaper than what he’s charging; why don’t I set up my own business?” A year later you’ve lost all your savings and the business is on the brink of collapse – as is your marriage. What happened?
In simple terms you fell into the trap of thinking that because you could do the technical part of the job that you knew how to start a small business and run it successfully – “I can fix a computer, therefore I can run a computer repair business, right?”. Wrong.
Studies indicate that about 80% of people starting a small business have no training whatsoever in running a business and that is one of the main reasons why most small businesses last no more than 3 years before collapsing. They may be the best auto mechanic in the country but if they don’t understand the fundamentals of running a small business then the chances are they’re not going to make it.
So, what can you do to improve your chances?
Well, there are two things I would suggest. The first is to get some training before you take the plunge. While you’re still in employment take some evening classes in business finance, marketing, and perhaps some sales training. These will all help to give you a good understanding of what it takes to run a business. When you do start the business I would also recommend you find a mentor or coach to help keep you motivated and on the right path.
The second option is to look at buying a franchise. The reason I suggest this is because of the support and direction you get from the franchise company while you’re an embryonic business owner. A good franchise will provide you with training, a system for running your business, ongoing support and, just as important, a brand name that will help give credibility to your enterprise.
You can make the leap from employee to business owner and you can make it successfully. It just takes a little more planning and forethought before you jump.