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You want to avoid this fate. But doing so may be an uphill task, especially when you’re up against the many prevailing factors bedevilling new businesses. In this article, we’ll examine seven steps you can take to see your business through its first five years.
Be Determined to Succeed
Your business’s early days will likely present you with numerous difficulties. You will have to get it funded and staffed and ensure that it remains a going concern. Whatever the obstacles that stand in their way, getting past them begins with determining that you’ll scale through. Motivate yourself by imagining what your business would look like when it eventually starts to thrive. Note the short-term milestones you need to reach, and set out for them.Create a Realistic Business Plan
A proper business plan explains what your business is and what it does, the market it targets, its strengths and weaknesses, and projections for its revenues, profit and expenses in its first few years. It could serve as your roadmap to favourable outcomes. If it will, it has to set ambitious but realistic aims for you to pursue. The plan must spell out wins that are achievable and costs that mirror present and possible future realities.Aim for Profitability
It is one thing to have a high volume of sales, but quite another to actually turn in a profit from them. The survival of your business ultimately depends on the latter; you’ll want to plough back more into your venture if it’s going to grow. Don’t give up after the first couple of years just because you haven’t attained profitability. Keep a decent margin between revenues and expenses. If your offering is great, you’ll eventually reap sustainable profit for it.Sign up for the Connect Nigeria daily newsletter
Work on Your Finances
A lot of businesses struggle with cash flow issues early on. That’s often because they aren’t generating enough on a regular basis to support their operations. Sometimes it’s a matter of not having a good collection system for gathering payments from customers. But if you don’t maintain a good record of where the money in your business is coming from or going, you won’t spot the problem until it’s become difficult to remedy. So, take bookkeeping seriously. You can solve your collection challenges with invoicing technologies and by implementing a well-defined process for receiving payments.Seek Referrals
Get your contacts—your family, friends, and acquaintances –to buy and/or try out your product or service. If they like it, encourage them to refer their own contacts to you if they need the sort of things you sell. Referrals are among the most reliable ways to gain customers; at least that’s what many successful small businesses say. The good thing is that you don’t have to spend a lot of money on making your clients point others in your direction.Prioritize Marketing
Instead of waiting for customers to come to you, you should put some effort into attracting them. This would imply designing and executing a really good marketing strategy. Find out who your typical customer is—what demographic they belong to, what they want, their buying habits, and what motivates them. With this information at your disposal, you’ll be better able to craft marketing messages that grab their attention and set them on the path to becoming paying customers.Turn to Mentors
It’s seldom a bad idea to seek the guidance of people who are more experienced than you are in your line of business. They could have insights about surviving and thriving in your industry that you presently don’t possess. Besides the advice they have to give, they could also connect you with their network, which may include individuals and organizations that’ll help your business do much better.Register to attend the CN Business Mixer
Final Words
For a majority of businesses, it takes a combination of smart planning, diligent execution, adequate resources and perseverance to survive the first five years of being in operation. You can steer your business through testing times by following the tips we have discussed in this article. Featured Image Source: iStockDid you find this article useful? Contact us: editor@connectnigeria.com