26 In the end, enthusiasm is not enough to succeed. It takes much more than that. You need to research your market, your competition, the financial feasibility of your concept, and more. As you fight through the battles of making your dream come true, you need to be able to go back to read and re-read your business plan. The concepts laid down in your business plan will help you to convince your bank to give you the loan you need, or to determine the best marketing strategy for your business. DonБt be emotional when you prepare your business plan. Treat it as a business process with goals and deliverables. Once you complete it, ask yourself, БWould I invest in this company? Б Remember, you are going to have to convince others to support your idea. Bankers, corporate buyers, investors, partners, and the like will look at your business based on facts. Their decision is not going to be based on emotion. When creating a written business plan you give yourself a chance to think about your idea thoroughly. As you put your ideas in writing, you tend to give them more thought. You might think writing a business plan is boring, or a waste of time. Truly, it should be one of the most exciting projects you could ask for. You are writing your future.
According to Innovation, Science Economic Development Canada statistics thousands of businesses exit the marketplace every year in Canada. Business failure statistics show that about 96 percent of (199 employees) that enter the marketplace survive for one full year, 85 percent survive for three years and 70 percent survive for five years (Key Small Business Statistics).
P Approximately 7000 businesses go every year in Canada. Microenterprises (businesses with 1 to 4 employees) have a slightly lower business failure rate than other small businesses; after five years in business, 70. 4 percent of micro-enterprises survived compared with 66. 9 percent of other small businesses (Ibid). According to an Industry Canada study, the main reason for (business) failure is inexperienced management. Managers of bankrupt firms do not have the experience, knowledge, or to run their businesses Failing Concerns: Business Bankruptcies in Canada. But I think the main reason why small businesses fail can be more specifically pinpointed; the main reason why small businesses fail is poor. Here is a list of things to do to avoid failure. This is one of the most common reasons for failure; people start businesses because they want to do a particular thing or love a particular product. I don t know how to put this any more strongly; it s not about you, it s about them – your potential customers. That s why everyone thinking of starting a small business should do a. A business plan is your ultimate planning tool and safeguard against business failure. When you work through it, you ll do the you need to do and find out whether or not there is a market for your product. Need a business plan template? My will lead you through the process. Before starting a small business, you need to figure out how much money you need to live and how much money is needed to run your business.
You can t ignore the money and just assume that somehow enough of it will come in each month. Nor can you ignore your bills. One local business person started a retail bakery on such a shoestring she was trying to sell potential customers product batches ahead of time (invest $200 now; get x number of loaves in the future) to keep her business going. Within six months she was behind on her retail rent. Within another six, her business had gone under. This is the part that s about you and you have to get it right or your small business is doomed. Too many people leap into selling their product or service without even considering the answer to this basic question. One person I know, for instance, decided to start a business selling cut flowers. She had the property and the garden for it already. She had even lined up distribution for her bouquets. Her business lasted three months – because she discovered that there was just no money in it. For example, Joe* and Tammy* started a bison ranch and within two years became so successful they can t keep up with demand for bison meat. But Joe and Tammy are of retirement age and don t have the energy or desire to continue with the business or do what needs to be done to grow it on. They ve put the. How much better it would have been if they had. At this point, instead of hunting for a buyer and putting things on hold, they could have already have brought a manager into the company or a new who would be interested in carrying the business on – and so the business would be moving forward rather than stagnating.
So many small business people work hard creating small businesses and building them into successful enterprises. And so many of these same people have no plan for what will happen to their successful small business when they re done working so hard. If you ask them, many say they ll sell their business. But this is a hope, not an exit plan. If you want to sell a business, it has to be saleable. Many small businesses aren t because they re dependent on one person s talents and personality. Others might be if a person gets their business into selling shape. (See. ) But is selling in the open market the best possible exit strategy for you? presents other possibilities. If your small business is a family business, provides tips for planning a smooth transition to the next generation. The best time to choose an exit strategy is when you re starting a business, not when you want to get rid of it. Business failure because of poor planning is completely avoidable. Once you know what kinds of planning you should do before you start your small business, it s just a matter of educating yourself and getting it done. Planning is always harder than doing. It takes more brainwork, it takes more time, it requires delaying your personal gratification. But the clich is true; businesses that fail to plan, plan to fail. Don t let it happen to you.