Every year, many small businesses start, and each year, many of them fail as well. There’s no guarantee that yours won’t be one of them, but there are things you can do to make it less likely that yours will be among those that falter.

Have a Business Plan

Many people start a business thinking that they don’t need to plan because they are not looking for investors or loans. However, there are a lot of advantages to putting a business plan together even if you don’t plan to show it to anyone. Doing so will teach you the discipline of focus which is a savvy skill that all entrepreneurs need at some, or all stages of their journey.

Your idea can look great in your head, but when you put it on paper, you may start to see the holes in it. This doesn’t mean that your idea is a failure. It just means that you may need to go back and rethink certain things, such as who your customers are, who your competition is and what your marketing plan will be. Take the time to really flesh out your business plan and get a good sense of where your weaknesses are so that you can address them before you are up and running.

Have the Necessary Funding

You might not need much money for the business that you are setting up, but you should have adequate funds for whatever you plan to do. If you need more money than you have, you may need to be creative about getting the cash that you need. There are better options than putting things on your credit card. For example, if you own your home, you could take out a home equity loan. You can see if you can qualify and review a guide on taking out this kind of loan. One advantage of a home equity loan over a home equity line of credit is that the interest rate is usually fixed. You should not borrow this money unless you know you can pay it back, so you might want to consider keeping your day job as well.

Don’t Overspend

Only borrow as much as you need, and if for some reason you end up with substantially more money than is necessary, you should still spend conservatively. Get what you need to operate effectively and to create a professional image, but don’t go above and beyond that. Stick with what you wrote about in the fiscal part of your business plan.

The Right People

The right people are the key to your success. This means making the right connections within your industry and, if you need employees or contractors, hiring the right people. How do you know if you’ve connected with or hired the right people? The former is a matter of building relationships with people that you know will have your back throughout your professional life. It’s also about finding people you can have a mutually beneficial relationship with. As for people who work for you, you should look for people who are able to support your mission and who do not need to b

This article appears in Jan 1 – Dec 31, 2021.