What's it really like running a new small business? Most people see the successful businesses, the millionaire or billionaire owner, see their humble beginnings and look at it as that's how you get rich. They look at it as only if I had the money or resources to start a business I will be rich down the line. To put it into laymen terms people say they have a great idea or plan for a business and immediately see dollar signs as if it will make them rich. Which TRUTHFULLY is not the case at all.
Running a new small business is HARD, DIFFICULT, STRESSFUL. It's not what it seems like. people don't see what happens behind the scenes in the daily operations of the business. You could be walking into a store, restaurant, or bank that from the outside looks great but behind the scenes is a struggling new business that's trying to survive. 75% of new small business fail within 3-5 years. Running a new small business is a 24/7 365 job. You have no days off, you have to be fully committed, and be willing to make ultimate sacrifices.
When running a new small business the first thing is going to be the start up capital. The average income for an adult in the US is roughly $30K-$35K a year. Which should tell you the majority of the population doesn't have a ton of money for start up capital. So lets start this in the eyes of the average person who's starting a new business. First of all kind of off topic, for me personally I'm highly against business loans when it comes to getting capital for a business. You have so many uncertainties in the business that the one thing that has to be certain is paying back that loan. Regardless if your business is successful or not you have to pay that loan back. Also you want little to no debt on your books when you start a business. Now the person puts thousands of dollars of their own money into getting the business off the ground. Pretty much everything they had and used all of their resources that now that person is broke or has very little personal money left. But now its congratulations you have a business up and running now your doors are officially open so what's next?
Now comes the possible struggles that majority of new small business owners run into. First issue that a TON of owners run into is that they have to build up a clientele for the business. Without customers and clientele you have no business. The first step into building clientele is an obvious one MARKETING. But marketing costs money, UH OH that's going to be a problem now. You've spent 100% of your money and resources in the start up capital just to get the business off the ground that you have zero money left over for a marketing budget. Damn what do you do? I have little to no money. My business is in the early stages not to mention the monthly overhead costs, payroll, and I still have bills at home that have to be paid. This is what we call BLEEDING MONEY. Your business is in the early stages so you have to grow the business for it to be in the black. The issue is your business doesn't generate the necessary cash flow yet so every month your pouring hundreds if not thousands of dollars of your own money into the business just to keep it afloat. Your business is constantly bleeding money. This is the #1 issue that kills and destroys new small business.
The first 6-months to a year of opening and running a new small business is going to be a struggle. Unless your very fortunate to have a business that immediately becomes successful and you start to net a profit within months (which is very rare) its going to be very difficult. Generally within the first year even if your in the black your just making back all the money you put into the business. There are so many issues and difficulties that come about behind the scenes.
The difference between successful business owners and non successful are the ones who understand their market and who know how to work around their issues. The #1 issue is marketing with a small to no marketing budget. My advice is to develop a marketing strategy or platform that is paid for on the back end. Groupon is a marketing platform that does this but be careful with Groupon because if your profit margins aren't wide enough it will eat up into your profits too much. So you will be put in a position where you'll have customers walking into your doors but you will only be making 50%-60% of the money generated from Groupon on an already reduced price. If your business has very wide profit margins that can handle that I highly recommend Groupon as a marketing platform in this situation. Now you can also develop a marketing strategy which will require some hustle on your end. let your customers market for you that is called C2C (Customer to Customer) marketing. Develop a very lucrative incentive for customers if they refer people to you. In doing this your spending no money up front while your customers market the business for you. Also everything is paid on the back in by just eating into your profit margins a little that's it.
Running a business is time consuming. Your going to run into serious issues, its going to put you in a financial bind early on. The stats say that you have a 75% chance of not even running a successful business. Its scary, stressful, hard but its what all business owners from humble beginnings deal with starting a new small business. But if you succeed you will look back on it and say I grinded everyday and it paid off.
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