Do you have what it takes to become a successful business owner? Not only one needs to be a risk-taker and aim for the stars, but there is also an array of systematic planning and foresight involved in becoming a successful entrepreneur. According to SBA, 30% of the start-ups fail in the first 24 months of inception, 50% in the next 60 months, and 66% in the first decade. (Source: Investopedia)
When so many businesses fail, what do a few businessmen do that makes their businesses thrive? Do you think that Mark Zuckerberg did not plan what he was going to do next after launching Facebook? Well, please stop thinking that.
According to Guidant financials, following are the reasons for a business to fail and take one away from their successful business owner dream:
Ensure that these aren’t yours.
To answer your question about what do successful business owners do differently? This.
1. Be the flexible problem solver
The founder of Facebook, Mark Zuckerberg said, all business owners should be passionate about being problem solvers. Be flexible when it comes to the approach but rigid on the goal, and that is how you can make your business work. (Source: entrepreneur handbook)
Being the youngest entrepreneur to make it big, we think it is a piece of advice worth following.
2. Monitor and plan systematically
What do we mean by this? You should be able to handle business finances with utmost efficiency.
While you may need to work on your routine, be punctual, be proactive and be a risk-taker, you should not ignore the systematic part of it. In order for one to become a successful business owner, they need to have a seamless system for their business to stand off.
From the operational to the financial aspect of it, you need to have yourself covered. How do you keep all of the organization’s data and financial information secured in one place? Deploy online accounting software to get the work done. Among the many available, for example, Freshbooks, QuickBooks, SAP, and many more, choose the one that helps you manage your assets, generate cash flow, track trade receivables and payables, is scalable, cloud-based, and above all, prevents data theft.
If you are able to get an in-depth insight into your organization’s finance and performance, then can you only plan ahead and be on the top of your game.
3. Have emergency funds
The rule of thumb suggests, raise more money than you require. Let’s delve deeper into this. While it can be due to operational lags, it is also true that they have liquidity issues. During the times when creditors are paid, and trade receivables are yet to be received, maintaining liquidity is of utmost importance. While credit and liquidity contributed to only a small percentage of businesses closing between the economic crunch of 2007-2008, and the COVID-19 pandemic, it certainly has been a major factor for businesses closing post-COVID-19, where they do not have enough cash sales, while no money flowing in from credit sales, forcing them to file bankruptcy.
At least 38 leading retailers and restaurant chains filed for bankruptcy, as quoted by Business Insider, and big retailers like JC Penny also filed for bankruptcy in 2020 owing to insufficient funds and deteriorating sales to pay off debt. (Source: CNBC)
Why? Didn’t have enough emergency funds to sustain themselves.
4. Have succession planning
Think you aren’t going anywhere soon? As quoted by Brian Headd, Economist, in 2018, about 1 in 12 businesses close every year. The biggest reason is the owner not being able to look after the business is the personal reason apart from the cash flow issues (as stated above). So, who takes care of your business to keep it thriving and growing while you take rest? The answer to that question would be ScalingPartners. They are very skilled in this line of work, and have the capacity to do that. In order to keep achieving your operational and revenue goals, you need to plan ahead of your time, and succession planning is one of them.
So, learn to look things in the longer term if you want your business to succeed and grow exponentially.
5. Have a plan
We do not need to impress this enough, but you should know already that those who do not plan anything eventually plan to fail. One needs to be able to work in accordance with the bigger picture. Carry out extensive market research, budget accordingly, prepare a plan, have a financial goal and mind, and then only would you be able to implement what we have quoted above and be the next successful business owner.
Pro-tip: Be prepared for losses. You should note that not all businesses bloom from the first month. In fact, if we are being real, no businesses give profit from the first month. The best bet is that one would achieve a break-even, but as long as you have a projection to reach the desired profit goal and you are moving towards it, you should be good to go.
Even if you were not an entrepreneur but wanted to live a successful life, you would still need to be disciplined in life. A few habits that, if implemented in life, can help you move towards your goal much faster. You would want to know those; thus, read below:
- Wake up early
- Become organized
- Take action
- Manage your finances well
- Be persistence
While starting a business is no rocket science, it does take determination in order to keep your business thriving and be able to achieve your business goals. When 8 out of 10 businesses close down, the other 2 manage to thrive and become successful in the future. Which one would you like your business to be, depends on your determination.
Since you have landed on this piece of writing, we would assume that you do want to become a successful business owner. Good Luck moving ahead and share your business goals and success stories down in the comments section.