Nearly half of all small businesses fail within the first two years of operation. The number one reason for business failure is inadequate planning. The second reason is under-capitalization.

So before you mortgage your house, or go into debt financing your business, you need to know if your business is going to do more than survive — you want to know if it’s good enough to thrive! Here are three things successful businesses that have stayed in business for five years or longer have in common:

1. The idea. A successful business start-up always starts with an idea. Something that makes your business stand out from all the rest. So how do you know if you’ve got a good idea?

You’ve probably got a good idea if you can answer yes to any of the following questions: Does your idea provide the solution to a significant problem for your target market? Does it satisfy a need or want? Does it create an opportunity?

The most successful businesses either fix problems (either real or perceived), or they increase your customer’s pleasure. They create a repeat need for a product or service among the target market.

2. The market. Your chances of survival are better if you can answer the following questions with a yes: Is there already a market for your product or service? (It’s much easier to fill a need than trying to create an entirely new market.) Can your target market afford to buy your products or services? (If they can’t afford it, it doesn’t matter how great it is, you won’t sell any!) Will your target market perceive your product or service as valuable? (If they want it, but don’t think it’s worth what you’re selling it for, you won’t make any sales.)

3. Your ability. Do you have the people, the resources and the knowledge to be able to consistently provide your products or services to your target market? Can you maintain a competitive advantage? Do you have enough manpower? Can you purchase the supplies and materials you need over the long run?

Your first step always is to create a solid business plan. Your business plan is more than an essay on “Why I deserve to get funding for my idea” however. Don’t spend all the time creating a business plan and then toss it in the bottom drawer of your desk. Your business plan should be a living, breathing roadmap that helps you make sure you’re on course and reaching the goals that you set for your business.

The second step to business survival is getting enough financing. Although the term “bootstrap entrepreneur” describes most small business owners, having enough capital to be able to keep your business afloat is vital to your survival.

When you’re creating your financial analysis of your business, make sure you’re being realistic about costs and expenditures, so that you give yourself the cushion you need to succeed.

If finding financing is a problem, either because you don’t have enough credit or equity, or there are other problems, take the time to look into the resources that are available in your community. There are a wide variety of grants and loans (including microloans) for entrepreneurs, if you know where to look.

Some great resources will be:
-The Small Business Administration
-Local Small Business Development Centers
-Women’s Organizations
-Local University or Community College
-Chamber of Commerce
-SCORE (The Association for Retired Executives)
-Nonprofit organizations that work on economic development in your area

Use other successful business models as a guide. When you’re getting started, look around. What businesses are successful? Why? What is it they’re doing that is working? What attributes do you admire, and why? You stand a better chance of succeeding if you’re modeling someone who is already successful.

Find a mentor. Most entrepreneurs have great skills and abilities, but no one does everything well. You probably already know what your strengths and weaknesses are. (If not, there are many resources and tools that can help you figure it out!) Rather than ignoring your weaknesses, find a mentor who can help you either build your skills in your weaker areas, or offer advice for getting what you need.

If you take the time to plan to succeed, you could be creating a legacy that will be enjoyed by future generations, and that other entrepreneurs will look at as a model for building their own businesses.

The Travails Of The Pros And Cons Of A Small Business Credit Card

For small business credit card getting a sense out of a deal is, in some instances, the most difficult thing to do. This is because most people could not instantly figure out the benefits they can derive from obtaining it.

Take for example the case of small business credit card. Some people contend that business credit cards are crucial in the growth of a business, while other s contend that it is just one way of losing their investments.

But whatever the point there is, only one this is certain, it is still a credit card and just like any financial decisions, extensive consideration is a must.

So, for those who want to know whether getting a small business credit card will be good for their company, here are some of the pros and cons to be considered first.

PROS

1. It is efficient and provides management on the companys financial charges.

With the small business credit card, most entrepreneurs can manipulate their costs and payments through separate charges consolidation. This means that the company will only have one billing statement with details on the employees expenses instead of having various statements and invoices.

2. small business credit card provide their clients with the opportunity to curb overspending in their employees.

Because the business owners are given the right to preset the credit limit of their employees, they are able to impede any probable overspending of their employees instead. This, in turn, poses great discipline among the people.

The statements that go to the manager or to the financial administrator are in full details of all the financial transactions incurred at a specific time. Hence, the company can track down the kind of spending habits of their employees.

CONS

1. It is still a credit card.

This means that even if it is a companys property, employees will still have the tendency to over spend or splurge into more cashless shopping. This can be very risky especially to business management who is primarily the one responsible for the accounts.

2. Any errors or faults can damage credit ratings.

If credit history is very important to common individuals, it has a greater impact on businesses. So, if something goes wrong with their business credit card, the effect is mostly imposed on the business rather on the employee.

So, whats the bottom line here? As compared to other types of credit, it is always best to monitor the spending habits. Credit cards can really be feasible where it serve its purpose, but can also do more harm than good if misused and taken for granted.