Building a business is challenging, and the statistics prove it.
The majority of businesses fail in their first 5 years, and the few that make it past that point, rarely make it past the next 5.
Those are pretty ugly odds, and that’s why it’s so important to ensure these 5 key criteria to your business success are all checked off before you start.
Business Criteria #1) Be in Business For Yourself – But Not By Yourself!
Most people that start their own business are attracted to the idea of being their own boss. Who doesn’t like the idea of being the one who decides how much you work, how hard you work, how much time off you get, how much your salary will be etc?
It all sounds great in theory, although we all discover very quickly that being your own boss, often just means you’ve created your own job and you’re now working harder than ever for less pay.
That’s why it’s critical that you ensure Key #1 is part of your business plan. You want to ensure you have a team supporting you even if you don’t have any staff or partners.
This can be done in a number of ways like forming project specific partnerships, being in a mastermind, having a coach etc.
The key here is not to be the lone wolf who says “if you want something done right, you’ve got to do it yourself”. People who say that work themselves into an early grave.
Business Criteria #2) Your Business Must Provide Ongoing And Unlimited Income Potential
If you’re used to being an hourly wage earner or a salaried employee, this might sound like a bit of a foreign concept, but it’s crucial to your success.
Cashflow is king when you’re in business, and ensuring you have a steady flow of incoming revenue and a an unlimited potential income is key.
If you ask yourself if you’re trading hours for dollars and the answer is yes, then it’s time to change your business model.
Get paid for results, not time.
Business Criteria #3) Serve Multiple Industries Whenever Possible Instead Of Being At The Mercy Of One Market
If your business is closely tied to one product or service, in one narrow market you become at risk of losing everything if anything happens.
A great example of this is Costco vs. a Clothing Store. Costco supplies a wide range of products to a large demographic, where a clothing store may cater to a specific demographic and carry a limited line of products. If trends shift in that market the store either has to react quickly, or risk losing their entire client base.
This does not mean you have to “be everything to everyone”. That’s a recipe for failure also. It just means look for opportunities to add value to a wider range of potential customers.
Doing this will make you more recession proof, and also more likely to be able to shift with changing trends, times and markets.
Business Criteria #4) Build An Information Age Business Not An Industrial Age Business
The industrial age business model of big buildings, lots of inventory, and high payrolls is a very expensive business model.
Today, multi billion dollar businesses are run from outsourced staffing, fulfillment centers for products or completely digital services with very little physical infrastructure.
Another advantage of this model is you’re able to test the market before making a big investment. You can market a digital product you haven’t even created yet, and then build it once you have sales orders.
Business Criteria #5) Follow A Business System With A Proven Track Record
McDonalds became one of the largest companies on the planet because of their system, not their burgers.
If you know going in that 8 out of 10 businesses fail, why would you start off by trying to reinvent the wheel. Innovation is great, but find a way to do something that’s already proven better, rather than trying to do something completely new.
Success leaves clues, so find a proven system, even if it’s in an entirely different industry, and model it for your business.
If starting a whole new business is just beyond your skill level, then plug into a system that’s already working.
Franchises are a great example, but they come with a high entry level. Most in demand franchises charge hundreds of thousands, if not millions of dollars to start, but following that proven system pays off in most cases.
If you’re looking for a business that incorporates all 5 key criteria to your business success, and doesn’t come with a huge start-up cost, then click the link below and watch the overview video.