After all the work that you put into starting a new business, a failure at this point would be devastating personally as well as professionally. As much as you may not want to think about it, however, it is nevertheless a distinct possibility.
Chron.com cites a study by the U.S. Small Business Administration showing that over one-half of all new businesses fail after the first four years and one-third fail after the first two years. Fortunately, there are steps that you can take as a business owner to beat the odds and prevent the failure of your business.
Develop a strong business plan
For many people, this is no simple task, but if you feel intimidated by the prospect of making a business plan, there are resources available to help you. A strong business plan expresses your goals and describes the method by which you intend to achieve them. Having a plan in place can help you navigate any unforeseen difficulties that will almost certainly arise.
Avoid high debt
Most business owners need to take out loans to get their companies off the ground in the beginning. However, be judicious about borrowing and remember that eventually, you will have to pay them back. Similarly, it may be inevitable that you will need to make use of business credit cards, but be careful not to run up a high bill and try not to carry a balance from month to month.
Manage cash flow
This can be difficult, especially in the beginning when you are trying to attract business. Nevertheless, it is vital for your business to limit expenses while trying to bring in more revenue to avoid negative cash flow.
There are no guarantees of success, but taking precautions such as these can help your business to survive during the critical early years.