Starting a business is hard work, and the success rate is low — just look at the first year failure rate. Only 78.5% of small businesses survive their first year.
There are many reasons that some business startups are more successful than others. One interesting line of inquiry looks at the reasons a person wants to be an entrepreneur.
Briana Morgaine writing in the online BPlans.com says “When it comes to starting a business, you’ll need a driving force behind you — something more than money. Whether that is a desire to make some small corner of the world a better place, or the feeling that you could be the one to perfect a certain product, you’ll need to hone in on that deeper motivation to be successful. Otherwise, it’s hard to keep going when times get tough.”
Young Entrepreneurs Share Their Motives
Entrepreneurs from the Young Entrepreneur Council were asked: What motivated you to start your business? Here are eight reasons they shared:
1. The desire to help out with a family business.
2. Finding a solution to a social problem.
3. Creating a custom product unavailable in the market.
4. Needing an escape from the traditional work culture.
5. Wanting to be your own boss.
6. A lifelong passion for business.
7. Commitment to social justice.
8. The challenge of making improvements to existing products and services.
You can find more about the individual stories behind the reasons listed in Briana’s article, 8 Reasons Why Entrepreneurs Started Their Own Businesses.
What Makes a Business Startup Successful?
One of the primary reasons for early business failure is running out of cash. Data shows that 29% of businesses fail because they run out of cash. What is essential is a robust and dependable accounting system to manage cash and help with projections. Accurate and timely financial information is critical to a successful effort.
Successful business owners put in place a good record keeping system, including cash flow management processes and strategies to provide information for financial decision-making. Seeking out advice about accounting systems and using tools like a software package or virtual business services to manage finances will efficiently keep track of how the business is performing, leaving owners to pursue the more challenging task of growing the business.
And here are some other helpful tips on what to keep an eye on during the first year, how to calculate your cash breakeven point, and managing variable expenses if you're thinking about starting your own business or have done so already.
For accurate record-keeping and reporting, cash flow management, and support on initial accounting setup, contact Myrick CPA. Recognized as one of Washington DC’s top accounting firms for small businesses, we can help set up the systems that will move your small business to success.