This is a very common question and the answer is very simple – do everything possible to succeed in business. But the answer may sound ambiguous because every business operates in different conditions, has different people and strategies in place. To avoid business failure, entrepreneurs must realize that they didn’t start the business to fail. So, to be successful, you have to plan and work hard.
Let’s look at some steps you must take to avoid business failure.
Tips to Avoid Business Failure and Making Successful Business
Start keeping records
Keeping detailed records of all your business activities can help you see a clear picture of how you and your employees are working. It will also give you a clear idea of where your business is heading to. If you are keeping track of everything, you will be in full control even if the business is facing a financial downturn.
Documents protect you against any legal mishap. If you have a clear idea of how your business transactions are happening and how your accounts are being maintained, you can avoid legal trouble. At the end of the year when all the businesses prepare their accounts, smart business owners take advantage of their written records and keep an eye on the cash flow. It not only helps them plan for the new year, but they can easily calculate their profit, loss, and operational costs with more accuracy.
Keeping records of small to big business activities will give you clarity about when you can put your strategies in place so that you can avoid business failure. Most of the businesses do not keep records of their activities, and this is why they fail. Even if you are running a one-man business, start writing everything.
Don’t waste your time in thinking how to become the best entrepreneur in the world. There’s no fixed plan for entrepreneurs. You’ll have to make your way. Education is the guaranteed way to avoid business failure and become the best in your field. Many of us start a business and stop learning. With the limited knowledge, people expect growth in their business. If you are not keeping yourself up-to-date with the most recent industry trends, your business is bound to lose the momentum. If you are not learning new skills and if you are not ready to accept the new trends in your industry, your business will be crushed by competitors.
Hang around people who are more experienced because it will help you learn at a much faster pace. If you can’t afford to pay a mentor, the internet is your friend. Find out who is doing great in your industry. Watch their videos, read their blogs, follow them on social media channels to keep your timeline filled with the latest information and updates.
Manage time & money
Many entrepreneurs lack these two skills. Procrastination kills productivity and many companies fail when the people behind them don’t know how to manage time and money. Have you ever wondered why some businesses thrive, while many others fail? Time management is not about creating a day planner to fill your hours with various tasks. You need to manage time smartly.
Here’s how you can plan for productivity.
- Take the first 30 minutes of the day to create a plan
- Define the results you want to achieve
- Learn to say ‘do not disturb’ to people and distractions
- Don’t multitask. Instead, focus on completing one task first
Even if you hire an accountant, you will still need to learn the basics of money management and bookkeeping. Familiarize yourself with tax, credit, and other basics of finance and accounting. There are many ways to keep track of your money in business, but before you take big steps, start with these 5 basic principles and keep practicing.
- Create a budget
- Save money
- Create new income streams
- Invest in a smart marketing strategy and know the principles
- Get paid on time
No matter how many management books you read, you must follow the right and applicable advice. If you run a small business or don’t want to hire a professional accountant, start taking small steps. Take help of free time and money management tools, and know how money comes to you and where it goes. Track every single dollar.
Invest in your own business
As soon as business owners start making money, they feel tempted to make an investment. From mutual funds to stocks, and real estate, there are thousands of ways to invest money. But why do you want to run away from your own business? Why are you trying to put money in something you don’t know about? If you are earning from your own business, put your money into it. For instance, if your business is related to garages, investing in garage software can help you manage and streamline your operations, making your business more efficient and profitable.
Why can’t you focus on making more from your own business when you have the money? Most of the businesses around the world suffer due to lack of capital. So, when you have money, there’s no point in making the same mistake. Invest in marketing your own products. Sell more, earn more. It’s easy and it’s a very simple logic. Start with online marketing. There are many ways to market your business online. You can start with paid advertising solutions such as Google Adwords, LinkedIn ads, Facebook Ads, sponsored content on Twitter etc.
Instead of spending hundreds of hours in learning the basics of a new business, put your money in the business you know everything about. Your own business, of course. Don’t waste your time and energy on something that puts your money at risk. Learn the basics of online advertising, and if you are not sure, ask a professional to help you set up an advertising campaign for your business. You can start advertising with as low as $10-$15.
Stop predicting, start planning
As a business owner, you can’t predict the future, but you can plan for it. Educate yourself and take calculated risks depending on what you know. For example, Terry Semel who served as Yahoo CEO (2001-2007) joined the company when Yahoo’s ad sales were dropped to a record low. The man shifted the company’s focus and after completing his first year as Yahoo CEO, the company generated a $43 million revenue. When he joined Yahoo, the company was suffering from a $93 million revenue loss. What would you call it? Coincidence, Yahoo’s luck or strategic planning?