The number of Americans launching new businesses spiked in 2020, reaching the highest level seen in the last 13 years, the U.S. Census Bureau reports. While launching a business can be a great chance to be your own boss, create a passive income stream or even just fulfill a lifetime passion, it isn’t without its risks. In fact, within just five years, 50 percent of the new businesses launched in the last year will fail.
If you’re an aspiring entrepreneur, keep reading to learn a few pro tips to help you stand the test of time and find the success you’re dreaming of.
Choose Your Opening Date With Care
One of the biggest decisions that any aspiring entrepreneurs will have to make after choosing the type of business they plan to open is when they will open it. This is a multi-part decision; you’ll need to consider when you’ll have your resources, product and infrastructure ready for launch, the time of year that will be most beneficial to opening your business, as well as when you yourself will be financially and emotionally prepared to take the next step.
The latter consideration will depend on whether or not you’ll be leaving another job to pursue your new business venture, and when that makes the most sense for you to do so. As a general rule of thumb, entrepreneurs make less than half of their prior salary in the first year of running a business and reinvest most of their net profits back into their business. While you may be able to draw a greater salary in your second year as a business owner, this isn’t a guarantee. You’ll need to consider how long you can go on your savings if it takes a year or longer for your business to become profitable.
Consider the Time of Year When Launching Your Business
When you’re financially prepared to leave your old job behind and have your resources in order to launch your new business, it’s time to pick an opening date. The time of year that you launch your business will affect how you launch, as well as some of the measures you’ll need to take to ensure a successful opening day.
For instance, launching a business with a health or wellness approach in the springtime can help you cater to customers looking to make a fresh start. Launching in the fall or early winter is a great chance to cater to holiday crowds and take advantage of a strong retail season. But you’ll need to be sure to have the inventory in place to meet demands and ensure that you and your employees are ready for long, busy days.
Weigh Your Long-Term and Short-Term Investments
As a new entrepreneur, you’ll need to constantly weigh in on the benefits of long-term and short-term investments. In the early days of your business, you may be forced to pick and choose between investments to stay on budget, which can mean making the tough decision of picking those investments that promise the greatest returns.
One investment that promises both short-term and long-term returns is a customer relationship management (CRM) system. Implementing this technology from the start is a great chance to get a jumpstart on improving your customer experience and developing strategies for improving your market targeting. With the right CRM system, you’ll get a personalized solution for pursuing leads and growing your customer base. You’ll also have a leg-up on managing your sales performance and revenue management right from the start.
Finding Success as a New Entrepreneur
Launching a new business can be a confusing, scary experience. But with these pro tips, you can overcome some of the common early challenges all new business owners face and increase your chances of finding success.