Core Business Solutions Advice

In my last 2 blogs in this series, I reviewed two of the seven areas that I think contribute greatly to business failure. Those were 1-A Lack of Planning(No business plan) and 2- Starting a Business for the Wrong Reasons.

Another common fatal mistake for many failed businesses is having insufficient operating funds. Business owners underestimate how much money is needed and they are forced to close before they even have had a fair chance to succeed. They also may have an unrealistic expectation of incoming revenues from sales which is typically as a result of incomplete research or due diligence.
It is imperative to ascertain how much money your business will require; not only the costs of starting, but the costs of staying in business. It is important to take into consideration that many businesses take a year or two to get going. This means you will need enough funds to cover all costs until sales can eventually pay for these costs. This same principle also applies when you plan to expand your product line or start new divisions of your company. Take the time and plan and research all the issues to remove any surprises.

But how does a business owner, especially a new business owner, discover what capital it will take to get your business off the ground? A good way is to talk with a CPA and review all the costs with them. CPA's are invaluable as they probably have clients that had the same issues when they started their business. Start with a P&L statement and be brutally honest with yourself. What will it cost you for marketing, monthly office expenses and the list goes on. Review every item and set some realistic figures. Talk with others who have started new businesses or ask business advisors or consultants or even some bankers for their input.

If you have actually completed a written business plan, you should already have potential budgets and forecasts figured out, thus part of the answer goes back to installment #1 {see topic #4 Financial} in this series of this blog-Planning! I see many new businesses try to build a business with too little funds as result of 'pie in the sky' thinking. Set reasonable expectations and assume that it will take at least 1 year before you'll begin to see any black ink.

Investigate every source you have to fund your business properly. Do it right the first time and avoid the heartache of seeing all your hard efforts just be for nothing. Secure the proper funding and if you have a real passion for your business, you chances for success improve greatly.

In about 2 weeks, I'll take up the subject of: "Poor Management" This is another of the top 7 major reason businesses fail and many see it as even the most common reason, so I'll explore it next time.

I sincerely hope this series is helping you. Until next time-

All The Best,

Walt Morey
Core Business Solutions www.corebizsolution.com

On May 16th I started a series entitled :The Top 7 Reasons Businesses Fail" and my first installment of the series , on May 28th, covered the concept of planning (or the lack of it) as the most critical and I believe the biggest reason businesses fail. I think another big reason for failure is that the business is started for the wrong reasons in the first place.

So, did you start your business for the wrongs reasons? Lets see,is the sole reason you would be starting your business be that you would want to make a whole lot of money? Do you think that by owning your own business you'd have all kinds of freedom and much more time with your family? Perhaps the fact that you wouldn't have to answer to anyone else, is that one of your reasons? If so, you had better rethink your position. These are not good reasons to start a business of your own.

You will have a better chance of success with your business if you start it for these reasons:

• You love and have a passion for what you'll be doing and based upon educated study and extensive investigation, you deeply believe that your product or service will fulfill a strong need in your marketplace.
• You don't let failures defeat you. When you make mistakes you learn from them and use what you've learned to succeed next time. Head SBA economists have noted that studies have shown that successful business owners attribute much of their success to "building on earlier failures" or looking at failures as a "learning process".
• You have and can maintain: a positive attitude no matter what, strong determination to get things done, an unrelenting drive and unending patience. When others give up, you are more determined than ever to do better.
• You have the required mental stamina to withstand potential challenges and you are physically fit to handle all the effort required. Many bankruptcies happen because of often overlooked, less-than-robust health.
• You thrive at taking charge when a creative or intelligent solution is required. You cherish independence and take control especially under strict time constraints. You'll 'get it done'!
• You exhibit in your integrity, honesty and interactions with others that you like--if not love--your fellow man. You can help and deal with all types of people and you strive to be productive with them as well.

So, can you be brutally honest with yourself and say" these are the reasons I have or want my own business?" Be sure to take off those rose-colored glasses and read these reasons over and be sure they are all your reasons. If you are missing any you'd better think again about owning your own business. It is not for everyone. Are you sure it's for you?

Next time, I'll take up the subject of: "Insufficient Capital" This is another of the top 7 major reason businesses fail.

I sincerely hope this series is helping you. Until next time-

All The Best,

Walt Morey

Core Business Solutions

http://www.corebizsolution.com/