By: Benjamin Louie
How to Survive Past Year 5
Here is the hard truth: 92% of startups fail within the first year of operation and most will not see profits until their fifth year in business. This is a product of an ever-growing business landscape being inundated with more businesses producing large levels of competition. Now you may be asking yourself “how can I ensure my business survives past the 5-year mark?” The answer is simple: it is the intangible assets in the business that make all the difference.
Let’s talk about business intangibles:
Trust is a mutual understanding between people and/or businesses to both partner with and to help each other to grow and become more successful. Whether you are trusted or not can make or break your business within the first year, and even until your business’s IPO’s years later. How do you develop this trust? By building connections within the industry and delivering on promises and deals, people and businesses can work towards raising the bridges that will continue to connect each other and pay dividends in the future.
Credibility is built on your and your business’s history of actions. Businesses need to know what you can do, will do, and provide. Credibility is what allows businesses to take relationships built on trust to another level: partnerships. This, however, requires work, time, and effort to build credibility is slow to establish and demands consistency. With time, people will be able to trust your business to do the right thing and act ethically, furthering your ability to grow.
Behind every trusted and credible brand there is an ever-growing base of loyal customers. Just as credibility and trust are important aspects to ensuring your business’s longevity, loyalty is also critical to building a business’s brand. Loyalty is shown through several actions such as giving high ratings on yelp or google, interacting with the company through social media outlets, and spreading news regarding your business. It is vital as an entrepreneur to incentivize this base through contests, raffles, and promotions. As loyalty expands, so to will the business.
Working on trust, credibility, and loyalty, you can build a firm foundation upon which your business can be mounted. It is these intangibles that separate the 92% from the other 8% that go on to succeed past the first year. Getting past that fifth-year hurdle, or even finding early success and profits, is determined by the level of growth and utilization of these business traits.
By: Benjamin Lioue