This particular story has played itself out many, many times over. A young, or sometimes not so young, aspiring entrepreneur has a great idea for the next big thing. They are so excited about this idea that they kick around the thought of launching a start-up based around it. They lose sleep and finally, decide to take the plunge. In a flurry of excitement and fear, they begin laying out a road map that will take them down the road to success. Will they make it to the end? Will they one day be able to say: “I have finally arrived!” Unfortunately, small business statistics say that they will not. This, of course, does not mean that all who try are doomed to failure, but in reality, half of all small start-ups fail in the first year. Even worse, 95 out of every 100 fail within the first five years. Those are not very encouraging statistics, but there are some step you can take and some things you need to be sure about so as to alleviate the statistical probability that you will be in the bottom 95 percent that are not in business in five years.
Make sure that the niche or business that you are pursuing is something that you are passionate about. If you are starting a small business, odds are you will not make much if any money as you are in the beginnings of building your business. Without the thrill of seeing the cash roll in, something will have to fill its void and your passion for your niche may be the only thing that has the motivational muscle to do that. As with any small business, you will have to advertise it. If you are passionate about it, then that passion will shine through in every aspect, including your sales and advertising copy.
Make sure that you understand the amount of capital that will be required to start conducting business and keep it operating until you are able to turn a profit. So often this calculation is based solely on start-up costs. However, start-up costs will not be the only out-going funds during this most critical time. Operating costs may very well match or supersede your start-up costs. Turning a profit can in many cases take years. The cost of running a business can easily exceed its start-up costs as time passes by and the bills add up. Low profitability or margin and low-income can easily wear down the enthusiasm of even the most driven of entrepreneurs. Calculate the cost of running your business each month and multiply it by twelve. That is you yearly operating cost. Keeping operating cost down is essential. In some cases, it is essential to survival.
Make sure that you are visible. This, of course, can be tough because being visible involves advertising which can easily be a huge expense if not done properly. For a small start-up, visibility is essential and low-cost visibility is an absolute must. Without a doubt, the most efficient and cost effective methodology for start-up advertising is Search Engine Marketing (SEM). If you are not technically astute, then using SEM as a marketing plan potentially has a large learning curve, but it is doable. SEM allows for highly targeted, niche specific and if done properly, geo-targeted traffic. If your small start-up is not visible in this manner, then the seventy plus percentage of the US population that uses internet search to research before they purchase may very well be buying from somebody who is visible online.
Passion, Capital and Visibility are requirements for new small businesses. Without them, a small business may very well be one of the 95 percent that will not be open in five years. Avoid becoming part of that statistic. Choose a niche that you are passionate about, understand not only the start-up costs, but also the operation costs and finally, get an SEM guide, get online and get visible.
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