Behind The Breakdown
When you see and hear about all the new businesses that start each day, you don’t stop to think about all that have, and will, fail over the next year. The truth is that a very large percentage of new small businesses fail within the first year even with all the resources out there to help. So, what makes all of these businesses fail when they have such a good start? Well, there are many factors that can go into a business’ failure, but the two main factors are money and advertising. Both are equally important, and both can make or break your business’ future.
The number one factor that causes any small business to fail within the first year is money. Without the right funding, a business can’t get inventory, licenses, employees, and so on, and without these things, a business can’t run for very long. Poor money management also plays a role here, as without the right management of the working capital that a business has, the money won’t be there for the truly important things that will make a business run. So, you need to know where to gain the working capital or start up money you will need, plus you need the money management skills to make sure that you put your money to work right.
The Small Business Administration has some excellent resources that can help any business owner with gaining the working capital they need, and resources on managing that money in the right way. They offer many great classes, both online and in person, and also offer free software that can help you manage your working capital and track each and every penny. All of the classes that they offer are free of charge for those that either own or are starting a small business, and they may also help you with information on where you can gain traditional working capital.
Tackle Your Way In
For traditional lenders, such as banks, you will need several things to get approved for either start-up funding or access to working capital. A great business plan is always a necessity for any business to have available, and you can learn how to write one through the SBA or you can find a professional service to help you create one. With this business plan, you will have to create financial statements that either shows your earnings so far, or your projected earnings to the bank or lender to show them that you can make up what you are borrowing. Each lender will require different information, such as tax returns (if you have been in business for over a year), your business information, a detailed list of what you need the business loan for, and so on. You will need either a good personal or business credit rating and you will also need collateral for your business loan for a bank or traditional lender to approve you.
Survival Of the Fittest
But, there is a growing market for non-traditional lenders that can offer great solutions for those businesses that might not have great credit or collateral that a traditional lender will require. Companies that offer business cash advances or business check advances are a great way for most businesses to find the working capital that they need to get back on their feet or expand their growing business further. These companies work with business owners to provide the working capital that they need without the strict requirements. This is a great way for a smaller business that doesn’t have a lot of business credit or collateral to gain the funding they need to survive in today’s business world.
Another factor that causes businesses to fail is lack of advertising. New businesses need to make sure that they get their name and service or goods out there for new customers to see. There are many great ways that new businesses can advertise, and you need to take advantage of all that you can. For those businesses that have been in business for a while, knowing how to advertise becomes the second areas that can business a business in jeopardy. Without the right type of advertising, your business name and what you do won’t be out there for prospective clients or customers to see. If customers can find you then how do you expect to generate sales? So, how do you know where to advertise and how much to spend? Well, the SBA can help with that as well, with information on where you can advertise to help your business.
But, that isn’t the only place that you can find advertising for your business, depending on the goods or services that you offer, newspaper advertising is always a great way to gain customers. From car sales to restaurants, newspaper advertising is everywhere and has worked for many years. Say that you want to reach a larger audience, or that you have a product that you’d like to sell nationally – look into a specific trade publication, both online and off, to place ads in to help target customers who might be interested in your product/service.
Of course, no one can overlook the web in today’s business world. Without web advertising, you are missing out on one of the biggest groups of prospective customers. Creating a great web site for your business is easy, you can hire someone to do it for you, or you can do it yourself if you are comfortable with your web design skills. Overall, you want to ensure that you have a site that is pleasing to the eye and the reader, yet meets the SEO (search engine optimization) standard to ensure top listings when someone searches for your specific services or goods. There are a variety of ways to advertise on the web, and once you have a great working site, it’ll open the door new marketing avenues to grow your business. Press releases, pay-per-click advertising, and paid placement ads are all great ways to advertise on the web and ensure that you drive traffic to your site.