Many people find the idea of opening their own company tempting, and for good reason. According to a survey of over 3,000 current and prospective small business owners, 55 percent of people who started their own business did so because they were ready to be their own boss. Meanwhile, 39 percent started their business to pursue their passions.
However, starting a small business is just the beginning of a long journey. Unless you make the right choices and learn the right things, your startup’s journey might end in failure. Here are a few facts about opening a risky business and what characteristics you need to cultivate to make it a profitable enterprise.
Small Businesses at Risk
Some small business ideas are riskier than others, depending on the market. Generally speaking, less flashy enterprises tend to last longer because they’re stable if considered uninteresting. For example, opening a small printing business can be a lot safer than starting a small information company.
This is supported by data collected by experts. In 2019, 63 percent of fledgling information companies closed, making the riskiest industry by a large margin. Other risky industries include construction companies, with a failure rate of 53 percent, followed by manufacturing business at 51 percent rate of failure.
Restaurants and other food service business often get a bad reputation for being high-risk, but according to experts, restaurants have an average lifespan of over 4 years. Approximately 83 percent of companies in the food service industry make it through their first year.
But selecting a stable industry for your startup is just one of the important decisions you need to launch a successful company. You also need certain characteristics in your business to ensure its profitability and resiliency.
Characteristics of Successful Startups
Successful businesses combine many attributes to guarantee they have what it takes to outlast the competition and attract customers. Here are five characteristics your startup needs to become a great business.
1. Innovative
The world is churning out technological advances in an unbelievable pace, and processes that were cutting-edge only a year ago might be outdated already. Your business needs to continually assess its operations and technologies to see if you can leverage new ones in their place.
If you’re running an engraving shop, check the market for the best laser cutting equipment for small businesses. If you’ve decided on becoming a retailer, consider opening a digital store rather than a physical one. The options for innovations are almost infinite.
2. Daring
In business, the adage of “no risks, no rewards” holds true. If you only play safe when making business decisions, you could be missing out in lucrative opportunities. You need to determine when is the appropriate time to fold the cards and when you should raise the stakes. Remember, you’re trying to cultivate boldness, not expose your business to risks. Conduct thorough risk assessments and setup backup plans before enacting any daring plans.
3. Reliable
No one likes a business that can’t keep its word. If you promise customers you deliver on the same day, then your products better be on their doorstep before the clock strikes twelve. Otherwise, you risk losing customers to competitors and threatening your source of income.
Don’t make any claims to your customers your small business isn’t equipped to fulfill. For example, unless you have access to a reliable courier service or have your own delivery vehicles, don’t promise same day delivery. That way, you won’t disappoint anyone.
4. Empathetic
When you’re dealing with customers, it’s best to empathize with them individually rather than treat them as faceless masses. Connecting with customers has been all the rage in marketing because it’s an effective way to build trust and loyalty.
The best way to empathize with customers is by offering them solutions to their problems, not sales pitches.
Don’t talk about what makes your product or service amazing, talk to your customers about how you want to help them. Focus on fulfilling their needs and being supportive and your startup will enjoy a solid customer foundation.
5. Adaptable
Markets can change overnight. Customers can abandon trends at the drop of a hat. Competitors can suddenly come up with amazing products. Your business should be able to address these challenges with minimal difficulty if you’re adaptable enough. You can encourage adaptability in your business by coming up with go-to plans when there’s a crisis.
But the best way to have an adaptable business to have an open mind. Always consider alternatives when presented with an issue. You should continually improve your skills and those of your employees, so you’ll be better prepared to think on your feet.
Starting a small business is a brave decision, one that needs to be supported by smart choices. Cultivating these characteristics is the smart choice your startup needs to not just survive, but thrive in the current economy.