How To Start & Grow Your Business

5 Steps to Start a Successful Small Business

Morgan Sims
Jan 21st, 2015
  • Estimated reading time: 3 min read
  • Hummy's

    1Ask a trusted 3rd party's opinion of your concept. 2Use accounting software to help stay on budget. 3Gain insights from your failures.
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Startups Misc.

Global Partnerships and Finance Photo Credit: violetkaipa

Any new business is a risk and a challenge. This is especially true for first-time business owners. To step out as an entrepreneur is commendable, but it is no guarantee of long-term success. That only comes with good decisions, consistency, and some luck. To maximize your chances of profiting from your new venture for years to come, there are certain basics to learn, principles that every successful business owner follows.

Here are the top 5 steps to starting a successful business.

1) Know Where You Fit In. Is there a real world need for the product or service you plan to offer? This holds true whether you are creating software or opening up a coffee shop. There have to be customers, living and breathing, who will come to be the lifeblood of your big idea.

2) Be realistic when analyzing just how big and far reaching your business can be. Can it truly survive and thrive? If you feel that your judgment is clouded (and if this is your first time, it likely is), ask a professional or trusted advisor to help you see any potential oversights.

It’s much better to find them now than before you’re fully invested. Of course, this process won’t bring to light every problem you will face in the life of your business, but it can help you decide whether it is prudent to begin at all, as well as save you a lot of headache later on.

3) Budget Like Your Life Depends on It. Because it very well may. It is not uncommon for new businesses to have no revenue for a year or more. Your first income may be several months in arriving, and this will likely be eaten up in your overhead costs.

Factor this in when you make your budget, and prepare for the worst. If you have financing in place to carry you through your worst case scenario, chances are you can actually create a better situation.

This is a much better option than setting out with too optimistic a budget, and finding yourself unable to make it work in real life. Accounting software for business makes this process much easier, but it won’t do the work of planning a good budget for you.

4) Surround Yourself With the Right People. This includes your employees, your financial team, and all appointments that you place. You want your business performing every task as well or better than you could do it yourself, at every level of your business.

This takes time, because you may have to build slower than you like. Better to enlist the best than to bring people into the fold who add nothing to your venture, or those who actually detract from your potential success.

5) Learn From Your Failures, Not Just Your Successes. In Science, researchers constantly face the temptation to focus only on experimental results that confirm their desired outcome. In this way, they can easily overlook the results that would lead them toward a different conclusion (or invalidate their hypothesis entirely). Unchecked, their findings will not correspond with reality.

Businesses can function the same way, with leadership ignoring feedback, brushing mistakes under the rug without the proper consideration. By responding to criticism and building upon poor decisions, a business can innovate. The first step in innovation is simply correcting an error, even if it is your own.

To survive, businesses must innovate many times, but those who ignore problems in their own judgment keep this fundamental process from ever truly occurring. Don’t fear failure and don’t punish it unduly in your workforce. Rather, treat it as an opportunity for growth.

There are many other techniques by which an entrepreneur can make a new venture more likely to succeed. In some ways, great business leaders are only grown through trial and error. However, there are ways to set yourself up for success through planning. Methods like these are used by the greatest businesses in the world. Maybe one day yours will be among them.

This article was written by Morgan Sims and published on iMedia Connection.

iMedia Communications, Inc. is the most influential community of senior marketers in the rapidly evolving digital world.