Only 75 percent of new businesses survive past the one-year mark. That means that 1 out of every 4 businesses will close their doors before the end of year one. And while you would think that making it past year one gets you to the summit, the reality is that each subsequent year becomes harder to survive with only 69% making past year two and only 50 percent of businesses making it to the five-year mark. So what’s the difference between the startups that make it and the ones that don’t?
In a recent article from Intuit, I outline five keys that successful businesses can use to help conquer year one. Each of the keys is a step in building a solid foundation to help support your startup through the first year and for years beyond. These include:
- Get A Solid Support System: Surround yourself with positive friends, family, mentors and colleagues who will support you and provide unbias advice during your building period.
- Know Your Customers: Even the greatest business idea will fail if there is no market demand for it or if you fail to get it to your target market. Research, test and tweak until you get it right.
- Know Your Strengths: According to Jim Clifton, Chairman and CEO of Gallup, successful entrepreneurs have common core strengths. Know what your strengths are and then play to them.
- Plan to Be Unprofitable: The first few years of any startup are very rarely lucrative, so be realistic about that and come to terms with it. That means finding ways to survive without a steady salary.
- Measure Results: Every single thing that you do as a startup should be measured and analyzed. This is the only way that you’ll be able to gauge accurately what’s working and what’s not and then make needed adjustments.
The life of an entrepreneur and a startup business is filled with unknowns, endless hours and lots of ups and downs. By going into the process with realistic expectations, a solid plan, a lot of determination and these five keys, you’ll have a greater chance of being one of the 75 percent that survive year one.