It’s a scary fact that nearly 85 percent of all new businesses fail within two years from the day they begin operation. Research has shown that when a new company doesn’t make the grade, the primary cause can be traced to one or more of the following four areas: marketing, scheduling, community involvement and worker competence. Here’s a closer view of these core factors, which seem to make or break the entrepreneurial spirit:
Studies by major banks throw light on the importance of a comprehensive marketing plan for any new entity. Lenders demand business plans before extending a line of credit to a firm. Those plans routinely include two-year sales forecasts and accompanying profit data. In fact, plans backed up with extensive data and solid research almost guarantee a new company will survive for at least five years. Plans that were thin on numbers and concrete projections are a major warning sign for lenders.
What’s the lesson? You have a better-than-average chance of succeeding if you dig in and build a comprehensive marketing plan before day one. Mixing up traditional marketing strategies like event marketing and expand your online presence through digital marketing will help you get ahead in the business. Banks know it, and managers should understand why it’s true. Planning makes perfect.
Automated Scheduling for Employees
Sole proprietors and two- or three-person partnerships can get by without worrying about scheduling. The rest of the pack, who employ anywhere from five to 5,000 workers, will encounter massive headaches without the right scheduling tools. The very good news for managers is that sophisticated, accurate time-clock and schedule technology doesn’t cost much but it delivers huge advantages to companies that make use of it. A good employee schedule tool that accurately tracks hours worked, time off, job location, ID verification and other key data is the life blood of any company that wants all its departments to run smoothly.
Solid Community Connections
Small firms that make fast connections to the local community have a much greater chance of long-term survival. Founders often overlook this aspect of marketing, called wide branding by academics. But it brings tangible, measurable results in short order. When employees volunteer at local food drives, for example, it lets people know your business exists and is willing to take part in non-paid activities that benefit the community at large.
Finding, hiring and retaining people who can help your organization achieve its long-term goals is the domain of the human resources department. It’s worth remembering: every Fortune 500 company began as a startup with very few staff members, or in many cases a lone individual with an achievable dream. Once your firm is off the ground and bringing in new clients, you need a human resources team that knows how to attract competent, trustworthy professionals.
No company can survive for more than a few years when high turnover is the norm. Getting engineers, accountants, programmers and other key people on board is the first step. The equally important task of keeping them happy with fair pay, an upbeat workplace and attractive incentives for service longevity is the other piece of the HR puzzle.