Most small businesses fail during the first year of operating. Some types of businesses have an even higher failure rate, including businesses like restaurants and bars. Any type of business with a high operating cost is more likely to fail quickly because when you first open, it takes some time before you see customers actually walk through the doors. While Bobby Flay and other celebrity chefs can open multiple successful restaurants within a year, Joe Smith cannot do the same thing because he does not have the name recognition and the instant customers. Right now, you might ask yourself what you can do to keep your small business from failing, but the first question you should ask yourself is how you can save money.
When you save money on your business, you instantly set yourself apart from other business owners. The problem is that many companies believe that the best way to start is by making a grand splash. The owner spends too much money on renting or buying property, hiring more employees than he needs, throwing a large launch party, and advertising in every way possible. When the proposed customers fail to appear, that same owner finds himself struggling to pay for the overhead costs and even paying the salaries of employees. Numerous advertising companies have to write off customer accrued expenses each year due to the fact they have declared bankruptcy or just can’t afford to pay. This has happened to the best of men and women all over the U.S. and it is normally an honest misjudgment.
The first year your business opens is the hardest. You will not have many customers, which means that your profits are low if existent at all. For many owners, the small profits are not enough to pay the other costs of running the business. Business mentoring coaches tell clients that you should create a budget that shows every dime you need during that first year. When you begin applying for grants and loans, compare the money you have with the money that you get. Compare the total amount to the total needed for that first year. If you discover that your initial costs are higher than the total you have, you must go back to the drawing board.
Examine all of the costs that you have and look for ways to reduce your overall spending. You can easily find used equipment, including merchant services credit card machines, which lower your equipment costs. You might find that you can use fewer employees than you originally planned for because without customers, you do not need a large number of employees. You should also compare the cost of your products and look for cheaper products. The fastest most efficient way to get customer to start walking through your door is via co-op marketing. Co-op marketing is changing the way businesses compete in the marketplace and is light on the budget. Just remember, the more money you have in reserve, the longer you can wait to see profits.
AcQyro – The Customer AcQuisition Platform