Most Business Fail; 3 Ways To Succeed

Avoid unnecessary debt

When starting a new company, everybody thinks they have a brilliant idea that can become a big business—if only they could get the funding. This is an obvious step to setting up an enterprise, but thinking that you need financial resources to further your business, can often be an error. Money is better used as collateral rather than as expenses.

You don’t always need a venture capitalist or a bank loan— if you have done your research, you know the minimum amount of money needed to start a business in your sector and have saved up for it. If not, you can use money saving techniques or borrow only the bare minimum.

This practice is called bootstrapping and is a more of an attitude than a financial planning strategy. It is the understanding that going into debt is one of the biggest causes of business failure, and that it is better to risk your early profits rather than long term ones.

Do your Research and Development

Most people can tick items off in the things-to-do list before starting a business: having some savings, knowing the industry and the market.

Many people actually tend to do very little market research before developing their product or service that will help them assess if their business will be better than the others. It may be that you have a revolutionary idea that solves a basic need, but it is vital to identify some of its flaws or the things that will make it unappealing in the long-run.

Edison tested hundreds of prototypes before he perfected the light bulb; try to perform small scale trial versions and work on the feedback before you try to reach every potential customer.

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