Most businesses fail inside of 10 years. It’s a sobering statistic, with 71 per cent of companies failing by year 10. The hardest hit industries are in information and transportation, with just 37 percent and 45 percent, respectively, remaining in business after 4 years. Here’s how to avoid becoming another statistic.
Don’t Hire Unqualified Employees
When you’re first starting out, it’s tempting to want to take on extra help. In fact, in many cases, this can be a good thing. Too many entrepreneurs like to tackle everything themselves. There’s something romantic about building your own business all by yourself.
But, when the time comes to hire people, a lot of business owners turn to friends, family, and other people who might not necessarily be qualified, even if they seem like decent folks. Also, don’t hire the lowest wage worker. There are plenty of people willing to take a job for a low wage these days, but not all of them are qualified.
Talk with experienced entrepreneurs about the level of skill needed for the job you’re hiring for, as well as the market rate for such talent.
Work With Someone
Don’t be afraid to work with a co-founder, especially if this is your first business. Find someone who has done it before, made mistakes, and come out on the other side, healthy and profitable. Those people will help you avoid a lot of the mistakes that most new business owners make. And, the experience will be invaluable.
Imagine not having to make mistakes about your corporate structure, taxes, and payroll or hiring mistakes. Being in business is already risky enough. Let someone else show you how to get around the administrative and legal hassles that all companies face.
Don’t Forget Payments
You need a way to take payments. Many businesses don’t think enough about this issue because they take credit cards for granted or they themselves pay cash for most things. But, many consumers use debit cards and credit cards and, for those transactions, you’ll need a good merchant services provider.
You can find them through sites like www.merchantservicesuk.co.uk, but just make sure you understand all of the terms and conditions of the contract before you sign.
Don’t Be A Patent Troll or Intellectual Property Snob
Entrepreneurs are “idea people.” That’s what makes their business so cool – they have a killer idea that they think they can make money with. But, in the process, they get “lawyered up,” and they lose sight of what makes ideas saleable.
Lawyers love the idea of patents and trademarks and, while there is a place for them, you shouldn’t get so wrapped up in them that you can’t (or don’t) share those wonderful ideas with other people. Ideas are a dime a dozen, really.
Most people, even successful people, won’t steal them from you for two simple reasons:
1) They’re too lazy to follow through or;
2) They don’t have the money or drive to see it through to completion like you do.
Finally, don’t forget that you don’t have to hire a staff (that gets expensive). You can always outsource labour to third-party freelancing websites or to incorporated vendors. Don’t try to do everything yourself. In general, you can outsource menial administrative tasks and bookkeeping to other people while you focus on the money-making activities.
Joanne Andrews is a business consultant. She enjoys writing about the business world on the web. Look for her articles on many business and entrepreneurial sites.