Everyone who starts a business wonders what their chances are for success. And because no two businesses are the same, this can be very difficult to predict.
According to a 2010 Stats Can report, about 96 percent of small businesses (1-99 employees) entering the marketplace will survive for one full year, 85 percent survive for three years and 70 percent survive for five years.
"Starting a business is the easy part," says Mike Michell, national director, small business, RBC.
"Building a successful, profitable business takes patience, determination and focus, never taking your eye off your business goals."
Here are a few tips from RBC that can be applied to virtually any new business, increasing the odds of survival.
MAKE A PLAN
The creation of a business plan is essential to the survival of any business. It will help you to identify your customers, your market, the competitive landscape, and other important aspects of your business. It will also help you identify potential opportunities and obstacles that might not have occurred to you. As your business develops and grows, it will serve as the yardstick against which you can measure your business performance, so you can make sure you're staying on the right track.
Establish a support network
Business owners tend to be independent-minded people who are more inclined to solve problems on their own than ask for help. But don't be shy about asking for advice from people who are already working in your line of business. You'll be surprised how many of them are willing to share industry information or serve as sounding boards for your ideas. Other people to consider for your professional network include suppliers, customers, accountants, lawyers, and financial advisors.
Be a student of your business
In order to become successful, your business needs to stand out among the competition. Your "unique selling proposition" may be your product or service, price, selection, or any of a number of things. But whatever it is, you need to understand the market, and know what your competition is doing, to ensure that whatever you are offering is more appealing to your potential customers than anything else out there. Online research can be helpful, as well as joining industry associations, and of course talking to your customers.
Keep an eye on your cash flow
Without a clear picture of your daily sales revenue and expenses, you won't know how much your business is making. That's why keeping an eye on both your start-up and ongoing (business as usual) cash flow is crucial to the success of your business. It's also essential for forecasting, as your predictions and planning for tomorrow are based on what happened today. Over time your forecasting will become more accurate, so you can plan for fluctuations in your business due to seasonal or economic factors. It will also help you determine how much you need in reserve, or what your business line of credit should be, to keep you in the black through slower periods.
For more information visit:www.rbcroyalbank.com/business
