Navigating the complex world of starting and running a small business can be challenging, but that does not stop aspiring entrepreneurs from founding one of over 400,000 new U.S. businesses each year.
That said, U.S. Census Bureau data indicates that since 2008 the U.S. has seen more businesses close than open. To ensure you’re not one of the thousands of failures each year, use these three tips to help navigate the uncertain and risk-laden small business environment.
1. Find good mentors
Good mentors are invaluable assets to small businesses though they are not always easy to find. Ideally, your mentor should genuinely care about your success but remain objective; be knowledgeable, but actively listen first. Quality mentors serve as an impartial sounding board when you need to make difficult decisions, introduce you to key contacts needed to grow your business and help you hone your business model to a point of profitability.
“My mentors emerged organically from informal conversations I had while out in the community. An informal conversation established rapport and I just built on that and kept going back to them for help as needed,” recalls Quentin Edison, CEO of Broadway Motion Design.
2. Continually validate your market
Many businesses fail because they lack sufficient product-market fit. When launching a new product or service, take time to go out and pitch to potential customers. Conducting small pilot studies can teach you a lot about your customers and over time you will become much more acutely aware of their needs and preferences. When considering opening a restaurant, perhaps you first “begin with a small booth at a Saturday market, then perhaps scale up to a food truck and then grow into a more brick-and-mortar location once you know what you are doing is working,” says Dr. Jeff Vanevenhoven, Entrepreneurship Professor at the University of Wisconsin-Whitewater.
3. Spread the word
Getting the word out and generating a buzz around your business is critical, and most cities have a variety of ways for startups to get the word out. Attending chamber of commerce networking events is a great starting point, as is participating in community pitch events. You could also consider volunteering to speak about your startup experience on college campuses, or contact local civic groups who regularly host speakers for their meetings. Take advantage of any and all opportunities; while they won’t all prove fruitful in the short run, over time your cumulative efforts should yield valuable results in the form of meeting new potential customers or mentors, connecting with potential investors or garnering some media attention.
These tips do not guarantee success. That said, the most successful business owners I know have quality mentors they rely on, invest countless hours talking to customers and ensuring they are building products their customers want, and live the mantra, ‘always be pitching.’