Self-employment

Small biz success in 2008

If you're dreaming of launching a small business this year, give yourself the gift of a business plan.

ROGER PIERCE -- www.bizlaunch.ca
[ 2008-01-09 ]

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Canadian statistics indicate 80% of new small businesses will close within the first five years. Why? Reasons may vary, but the main cause is insufficient cash flow.

BUSINESS PLAN


A new small business owner usually doesn't take the time to prepare a proper business plan, which forces him or her to research costs, identify a market niche, project sales, test assumptions and otherwise plan ahead. Operating blindly and without focus, these entrepreneurs drift aimlessly, make reactive instead of proactive decisions and generally "wing it" day to day. There's no real revenue momentum because there's no direction to the business, and cash eventually runs dry.

New entrepreneurs can also be overly optimistic about their new ventures, telling themselves customers will rush to buy their product or service and riches will soon pour in. Convinced the big money is just months away, a new entrepreneur may decide to "live it up" and withdrawal too much money or overspend on startup expenses.

It always takes longer than expected to build a small business. If you plan to join the estimated one million Canadian startups in 2008, take the time to write a proper business plan. Overestimate your expenses and underestimate your revenues -- and extend the time you think it will take for sales to come in.




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