Despite the best intentions, a large number of startup businesses in California fail. The challenge is that it may take some time to understand the industry and the best means for business operation. And in its early phases, mistakes made during day-to-day operations could produce costs that lead to closing the company’s doors.
In a January Forbes article, two business partners discussed the lessons they learned while first opening their business. Some of the most important lessons include:
- Making efforts to build its customer base. It’s important for a new venture to market itself to quickly bring in customers. This is a continuous process that does not end by locating a certain number of customers. There are no assurances that customers will remain for any length of time. And the larger the number of customers, the more flexibility a company has in gaining revenue and setting prices.
- Not becoming dependent on one customer. While any business welcomes the attention of their best customer, it is a mistake to become too dependent on them. While that customer may generate the most revenue for the business, that revenue can just as easily disappear if the customer chooses to leave. And they may leave for any number of reasons. Also, by not building up a customer base, a business may not have a broad understanding of the needs of the typical customer, or how to attract them to your services.
- Paying ample attention to the most important tasks. An entrepreneur needs to pay attention to those items that will bring in revenue. It’s too easy to be distracted by day-to-day matters while ignoring items that can most benefit the company. It’s important to have a good work staff to handle the routine matters of a business.
- Have available the resources to meet the needs of the customer. A company needs to work as a team so that the largest burdens do not land solely on the shoulders of one particular employee. That employee may have other fires to put out, so other employees at the business may need to step up.
Finding the right advice and guidance helps better assure success
Research demonstrates that a significant number of new businesses fail within the first year. And sometimes the mistakes made that lead to closing are avoidable.
More importantly, it’s important that entrepreneurs understand that their business can succeed. It requires the right legal structure, an understanding of the tax implications of operating the business, and understanding state, federal and even international laws. Having the services of experienced business attorneys can help a business get off to the right sort of start.