Only 1 out of 5 businesses survives the first the three years. The majority of these businesses go under due to poor business decisions and lack of support. Once a business hits its three year mark however, the chances of it failing dramatically decrease.
Here are the top 5 rules to follow if you want to get your business to the three year mark (and beyond!)
1) Commit to Commitment– Being a huge fan of the show Fraiser, I remember a particular episode where Niles advises his relationship shy brother to “Commit to Commitment.” If you are truly serious about seeing your business succeed-I suggest that you take this first rule to heart. Once you decide that you are in it for the long haul, you are much more likely to see eventual business problems as challenges to overcome. Don’t run your business with one foot in the boat and one foot on the shore.
2) Love thy numbers– I will be the first to admit that I was never a fan of math class. History and English were much more my cup of tea. However, when it comes to business-I love the numbers. There can be no way around this rule. Can you delegate this task? Sure. Is it advisable? No. Especially not in your first three years of business. If you need help understanding and managing the numbers-get it. But at the end of the day, make sure you are the one tallying your numbers. I am not talking about complicated formulas here, but if you don’t keep a detailed expenses sheet you are bound to get into trouble. Here is a quick test. See if you can answer these questions OR have the means (meaning papers somewhere) that can help you answer them. What were your total business expenses for last month? How many clients/customers do you need this week to help you reach your revenue goal? What is your revenue goal?
3) Be Value Driven– Make sure that what you are providing has real value to people-your people. If your products and services are valuable to your target market-it is just a matter of time before the business takes off. The world is full of people trying to make a buck and while that is the way of society, just be sure you are making that buck by providing a service people can benefit from and feel good about. If every day for three years you focus on improving your services rather than on making money-you will naturally increase your profits. People are happy to pay (and pay well) for products and services they enjoy.
4) Take Time out for Yourself– Running a business can challenge you in ways that you had never thought possible. If you are in it for the long haul (and if you are reading this far-I am assuming you are), take time out to recharge your batteries. Bill Gates is known to regularly take time away from his business in order to catch up with himself. If Microsoft can be okay without him for a while, your business will be okay without you for a few days as well. Often when small business owners are starting out they wonder if they can afford to take a vacation. My rule is-If you can’t stop thinking about taking a break for two straight days, it’s time to take that break.
5) Get a Support System– If you choose to ignore every other rule in this post, go ahead, but please pay attention to this one. Every small business owner needs a support system. Who do you turn to when you have questions? Need advice? Want to share a successful moment? A word to the wise-look beyond your significant other and family for business advice. While they may make ideal cheerleaders, they aren’t always the best people to go to for business advice Make sure you have a good mentor. The prerequisite to starting every business should be the creation of a solid support system. You can’t get through the first three years without it. I have never seen any entrepreneur do so and please don’t take this statement as a challenge. Get yourself the strongest team you can find and onwards you go!