Aspiring Florida entrepreneurs might want to avoid negativity during their early days of commerce. However, it is important to realize that only one-third of new businesses survive beyond 10 years of operation. In fact, nearly one-third will fail within their first two years, and half will go out of business by the five-year point. Although a founder might want to focus primarily on the potential for the business to grow and succeed, there are many situations that can deter these goals. In creating a business plan, it might be wise to include strategies for addressing potential issues that could cause the company to sink.
A business plan traditionally focuses on a few major aspects of operation. The product or service at the center of the company should be clearly explained. Additionally, the market and strategies for distribution should be covered. There should be an explanation of company staffing and management, and financial projections should also be provided and explained. A failure plan can be included in the business plan to identify how potentially damaging situations will be addressed.
There are several common pitfalls that can sink a business. For example, a catastrophic incident could decimate a company’s inventory, especially if there isn’t a good business insurance policy in place. A staff change could be devastating if certain parts of the operation depend heavily on that party, making it important to consider good retention practices. Financial problems can put an entrepreneur out of business as well. Reliance on a single product or a key client can also be devastating if there are major changes.
It may be impossible to anticipate all possibilities during the business formation process, but legal advice could be helpful so that some protective measures are incorporated into one’s business plan. A lawyer might help with non-compete agreements for employees, intellectual property protection strategies and other areas in which a client’s business could face risks.