Most Colorado entrepreneurs begin their new ventures with a lot of energy and determination. Despite these optimistic beginnings, 8 out of 10 small businesses are forced to close their doors within the first year and a half of opening them. Understanding why so many fail so quickly may help new owners to avoid being a part of these dismal statistics.
One of the reasons many small businesses are unable to continue operating is a simple lack of accounting skills. While a business owner may have a great product and excellent customer service, poor budgeting and failure to understand costs can put a business in the red. Part of budgeting for a small company is gaining an understanding of the business cycle and saving for the months that are historically lean.
A key part of any small company’s success is marketing, so failure to do any marketing early on is a big mistake. A small business owner should focus on an online marketing plan as well as other areas such as direct mail. Physical location is also a key to success, as certain areas naturally catch the eyes of passersby. However, even a less-than-desirable location can be enhanced with banners and other promotional materials to help potential customers find their way.
People who are starting their first small business venture may not understand all of the legal requirements that are involved. An attorney can often outline the regulatory compliance that the new company will be confronted with, both at the outset and as the business grows in size and geographic reach.