Avoid common pitfalls experienced by many new and existing businesses
What are the seven common challenges facing any business start-up or existing business and where can help be found?
By using resources, such as a local economic development agency and certified business counselors, aspiring entrepreneurs increase their likelihood of success. With access to comprehensive resources, clients are guided through the complex process of starting a business and are coached on strategies to overcome challenges such as:
- Having Sufficient Cash on Hand
According to the U.S. Small Business Association, one-third of small businesses fail in the first two years, and more than one-half within the first five. The reason is simple; too little cash on hand. Plan to have three times what is needed to protect you from downturns.
- Understanding Debt
Debt can be good if used to fund expansion and improve the bottom line. But in your early stages business debt is often personal debt, as pre-approved lines of credit secured by personal assets may be necessary guarantee a loan if, and when you need it. Therefore, it is important to know how deeply in debt you can afford to go.
- Securing Health and Disability Coverage
If you currently work for an entity that offers health coverage, you may be eligible to keep and pay your premium for up to 18 months while you shop for a different plan. Disability Insurance on the other hand, is generally non-transferable. As difficult as it may be, it is wise to plan for the unlikely possibility that illness or injury might prevent you from working.
- Thinking Big
To succeed, you'll need to compete with larger companies that have experience and resources. Downplay your size and focus instead on what you can offer as a smaller firm like greater expertise, attention to detail, customer service, and speed of product or service delivery.
- Utilizing Technology
Using the latest technology including laptops, smartphones, and Wireless Internet can offer you and your employees the edge in responding to customer needs, as well as keeping current with your market and competition.
- Making Sales Your Number One Priority
Your attention should be focused on sales and revenues. You won't grow if you don't sell your service or product, so plan to dedicate yourself or one employee to sales.
- Staying Focused
A written Business Plan that includes specific steps to achieve desired results will help you stay on course, and become your most important sales and marketing tool to potential lenders, investors, and/or business partners. Plan to plan!
There are many agencies and resources in Michigan that can help entrepreneurs address these and other business planning challenges. Begin by contacting your local Michigan State University Extension office or local Chamber of Commerce. Additional resources include the Michigan Small Business Technology Development Center and your local economic development agency.
Michigan State University Extension (MSUE) Economic Development Educator, Andy Hayes also serves as President of the Northern Lakes Economic Alliance (NLEA). For over 20 years the NLEA and MSUE have partnered to bring resources to communities and entrepreneurs. When it comes to economic and community development, NLEA is recognized as one of Michigan’s best practices for regional cooperation and collaboration. To learn more about NLEA and their many partners and resources, please visit the NLEA website.