What are the key steps to start a successful services business?
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This is a complicated question, so I am going to try to answer you as simply as possible.
The first key to starting a successful service business is to make sure that you will be able to support yourself through the transition from what you are doing now to getting your business up and running, and to the point that you can replace your existing income. I see a lot of people start a business, only to fail quickly because they can’t pay their bills. I recommend that you have at least one full year’s salary in the bank before you start your business, as you will most likely not make any significant income in the first year of the business.
Another key is that you need to have a passion for what you are doing. If you aren’t passionate, there’s a good chance you will fail. It’s really important to understand why you are starting a business. I see many people start a business because they were laid off from their job, or they need to make some quick money. This is not a good reason to start a business! You should be passionate about what you are doing, and you should also have significant experience, either direct or related, in what you are going to be doing.
As far as the business itself, you need to have a solid understanding of the market that you are getting into, and what your competitive advantage will be. You need to be able to pass the “so what?” test. When you look at your business and the advantages you bring to the table, ask yourself, “so what?” If you can’t pass this simple test, you need to rethink what you are doing.
Lastly, the biggest thing that I think sets successful business owners apart from those that fail is their ability to understand what their weaknesses are, and then surrounding themselves with experts that can assist them in those areas. I think it’s crucial to surround yourself with professionals such as: a good CPA, attorney, banker, and a business coach. These are “must haves” if you want to be successful!
Keep in mind that 85% of all businesses fail in the first 3-5 years. Another 85% fail after that. While this may seem like a negative, I truly believe these numbers simply point out that you need to be passionate about what you are doing, have solid experience, have enough cash to invest in your business and pay your bills, have a solid plan, and have a solid team of people that can support you during your journey. Once these things are in place, along with a little hard work, you’ll be successful!