Entrepreneurship is the lifeblood of any capitalist economy. In the United States, there are 627,000 new businesses every year.
Unfortunately, not all of them survive. An estimated 595,000 businesses shutdown each year as well.
There are a number of reasons that many new businesses don’t last. In other posts, I have mentioned that 82% of businesses fail due to cash flow problems.
However, the statistic is not particularly useful, because there are countless reasons for cash flow issues.
Many entrepreneurs and people unfamiliar with their businesses often think that laziness is the biggest true cause of failure.
However, this is not generally the case. Many entrepreneurs actually worked very hard, but still manage to get very little done.
How could this be the case? One major mistake that entrepreneurs make is investing their efforts and resources on the wrong priorities.
They often get bogged down with lots of busywork that consumes a large part of the day.
This could be because they are scared to focus on more intimidating tasks (even if those tasks don’t require more work at the end of the day).
Or they simply don’t recognize which projects are truly important.
What are some of the biggest priorities that you need to focus on as a new business owner? A few of them are listed below.
Come up with the right business name
You need a business name that is going to really resonate with your target customers. You need to make sure that your business name meets the following criteria:
- Clearly describes the mission of your business
- Is going to be appealing to your target demographic
- Doesn’t violate any other trademarks or intellectual property rights
This can be a tricky process. You should start by brainstorming and writing down every idea you come up with, no matter how bad you think it is.
You never know what bad idea might lead to a great one! You can also try using a business name generator to give you a little inspiration and help you come up with some initial ideas.
Create a solid business plan
As business coach and acclaimed author Bob Adams points out, you need a business plan to succeed. Without it, he states that you are leaving the success of your business to chance.
The level of detail in your business plan is going to depend heavily on the scope and complexity of your goals.
Some business plans are only a page or two long, while others can be hundreds of pages in length.
The important thing to focus on is not the length of your business plan, but rather to make sure that you cover all of your important bullet points.
Your business plan should include:
- long-term financial forecast
- a detailed description of your target customers
- an overview of your main value proposition
- a description of your leadership team
- and a thorough overview of your marketing strategy
Conduct detailed market research
The fate of your company is going to depend on your ability to attract and retain customers. You won’t be able to do this effectively without having a detailed understanding of your target customers.
You are going to need to do some thorough marketing research. There are two different types of marketing research: primary and secondary.
Secondary research involves looking at information that has already been compiled elsewhere, such as industry reports from companies like IBIS or publicly available government information.
Secondary market research might seem appealing, because you don’t have to do a lot of work to get it.
The problem is that it is rarely going to be representative of your company’s target audience, unless you are running a national business.
There are different ways to conduct your own market research.
You might want to start by conducting surveys of people within your target market, which would be the city that you intend to operate in if you are a local business.
It is important to get a large enough sample size of people that might be part of the target demographic that you are looking to focus on.
Another idea is to create your own website and try to build an email newsletter.
You could try using Facebook or Google Ads to get visitors to your site and see if they are interested in subscribing to your online newsletter.
From there, you can continue to ask them to share feedback in upcoming polls.
You should phrase the questions as a way of getting their input for the purpose of making the future product or service better for them.
Choose the right legal structure for your business
The legal structure of your business is also going to be very important to the future of your company.
You can choose between a sole proprietorship, a partnership or a corporation. You can also register as an S-Corp if you meet the requirements.
It is a good idea to speak with both an accountant and an attorney before choosing your legal structure. This is going to have significant impacts on various issues ranging from taxation and liability.
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