No one sets out to fail, but tragedy can strike even those who are most prepared. Lack of money is a common hurdle that often stands in the way of many professional pipe dreams, and sometimes, it seems impossible to begin a new venture especially in today’s flailing economy.
Forbes gives depressing statistics stating that 80% of businesses fail within the first eighteen months, and a dismal eight out of every ten startups that flop before the end of their second year. On the other hand, United States Courts recently revealed business bankruptcy cases were actually down 11% from last year.
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So, how can we prevent bankruptcy and stay off the Forbes fail list? Here are some methods to ensure that we can successfully transition from getting a paycheck to writing our own business checks:
First, find your niche
Whether creating a product or providing a service, find something that sets you apart from the crowd. Look for a void in the marketplace, something that is missing, a useful service that is not being provided or an item that you can’t seem to locate. Chances are if you are looking for it, so are others. By filling this void, you will not only be unique and valuable, you’ll also set yourself apart from the competition.
Don’t quit your day job
If you are lucky enough to have a job, before you resign, use your steady income to start building your new business without all the risk. Without a safety net, you and your business could be headed for bankruptcy before your venture has had a fair chance for success. You can focus on building your business into a profitable venture before giving up the security of your current employment.
Don’t rent an office space
Many successful businesses were started in a garage: Amazon, Apple, Google and Hewlett Packard just to name a few. Don’t rent expense office space unless it is absolutely necessary by turning a spare room into a home office, using the kitchen table or basement as a workspace.
Don’t hire employees
If you need assistance, work or help from others, hire contractors and use 1099 forms. You’ll save a lot of valuable time and money by avoiding employment taxes and other payroll deductions. Perhaps you can barter for goods and services with other small businesses.
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Don’t spend money on advertising
There are plenty of ways to promote and market your business without bankrolling a pricey ad campaign. Make your own videos and post them online, network on social media, submit press releases and start a relevant blog about your business. All of these methods can be used to advocate your business without spending a dime.
Don’t spend money when you don’t have to
Cut down and remove all of your unnecessary expenses. Forego your daily trip to the cafe for your trendy latte and make a pot of coffee at home. Dine out less often and instead invite friends over for potluck or to watch a movie rather than going out to the theater. Ditch those extra cable channels or switch to a cheaper provider. Trimming small daily, weekly and monthly expenditures can add up to some substantial yearly savings.
Get your business booming instead of going belly up. With some planning, research and strategy, we can be laughing all the way to the bank.