Starting a Small Business

Starting a Small Business

The statistics are mind numbing. In North America, 80% of all small businesses started this year will be gone in 5 years. Of the lucky 20% to have survived, another 80% will be gone in 10 years. That's a whopping 96% failure rate over ten years.

Would you start a small business if you were told that you have a 96% chance of failure? Not many people would. But every day, hundreds of people think they will beat the odds. They may be former employees, students, housewives, or others who have never had any business training but are sure that their product or service is so fantastic, so completely unique, that they are destined to succeed.

The hairdressers think that because they are good at cutting hair, they can own and manage a salon. Lawyers think that because they are good at putting together a brief, they can run a ten-lawyer law practice.

Small business is the engine of the world economy. Even Mircrosoft and Ford started in someone's basement or garage. However, people all over the world have an idealized and unrealistic view of how to operate a business, and most discount the importance of the basics, including basic accounting skills.

The small-business owner will need to base the business on sound financial and management principles. Business management is a separate skill from doing whatever it is that their business does.

What is their business plan?
What is their break-even point?
How about their plans for book-keeping for the business?
How about analysing and tracking financial information?
How about understanding and handling the complexities of starting, growing and exiting a business?
How to work with the accountant to strengthen the business and make it more profitable and risk proof?

Therefore, learn and be familiar with some of the basic essential knowledge before starting a small business.