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Could Your Idea Make a Viable Business?

According to Forbes, 8 out of 10 startups fail within the first 18 months. This statistic is crushing to those of us who dream of starting our own business. But don’t despair – 10% of Americans are self-employed so it must be possible. Looking at the data in a little more detail shows us what kind of start ups are most likely to succeed and fail. Here are some ways to know if your business idea is viable – and what to do next. 

Idea Make Viable Business

What type of businesses go under?

Let’s crunch the numbers to see if your idea is realistic. Statistic brain compiled data of start-up failure rates by industry. This way you can see what kind of businesses are least likely to succeed, statistically. At the bottom of the table are grocery stores, eating places and construction companies. While you might think that the best kind of business to start is a ‘nice little restaurant,’ think a little more and you will realize why this is one of the most difficult. Retail and restaurant businesses are very expensive thanks to space rent, ingredients and staffing costs and face big competition from well known chains. 

Self employment rates plummeted after the financial crisis, unsurprising, but have been rising again since 2012. In part, this is thanks to the internet. An online business is often the opposite of opening a restaurant – cheap to start, low staffing costs and with the potential for success unrelated to location. 

Think about market need

What is the number one reason startups fail? According to CB insights it’s that there is no market need for their product. Honestly ask yourself the question – is your idea something people actually need or just something you are in love with? 

All about the money

Whilst you don’t need a lot of money to start an online business, managing it well is key to financial success. These days there are lots of resources to support small business to be found online for free, including on how to manage your money. If you can’t afford to hire an accountant it may be worth taking some bookkeeping classes, either online or in person, to learn good financial habits from the start. 

Starting your own business can be a hugely rewarding and flexible way to earn your living. Being aware of the challenges and choosing a viable idea is the first step to success.

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