Many small business startups fail within the first 2 years of existence. There are several different factors reason for the failure. One reason many entrepreneurs often under estimate the need to find a niche market and to serve it well. Instead of finding the niche market they attack the big guys head on. If you have enough money to throw at 'this problem' you might succeed, but in reality almost every small business doing this will fail and eventually shutdown operations.

So, what should small business startups do to avoid this big mistake? How can they survive and grow and become successful?

As mentioned before - finding a niche market is the first big key to not be destroyed head-on buy the big guns. Never, ever try to be the "Wal-Mart" for everyone. Not everyone is your target group. Carve out a niche market, then slowly steal away market share from the market players. Eventually pick a niche that you know of where the market leader is not spending enough attention on. Grow here and grab market share. Eventually you will grow big enough without being noticed to become the market leader for this niche. Companies like Microsoft and Wal-Mart tend be slow moving but they have enough cash to catch up quick. We have seen situations where the small business owner was able to cash out big time from a situation where he/she was able to grab enough market share to be considered 'armed and dangerous' for the big guns.

Compete on things where large market players fall short. Compete on experience and value added services - not price. You will not be able to compete on price with somebody like Wal-Mart or Target. Their buying power is just too big for you to swallow. Let your experience disappear differences in price for a product. Give the customer the feeling that you know what you are talking about and that this experience is worth spending a little extra.

Emotions can be a big advantage for the small business startup. Bond with the clients and vendors. A personal (business) relationship that makes everyone feel good will get you repeat business and fair deals from vendors (friends don't steal from friends). If the vendor can make his share of revenue and you can get your share of the pot - everyone will be happy. Nobody likes to be squeezed by the big sales department of the market leader.

The work place. Be hands-on. Be the boss, but at the same time be the employee who does actual work. Don't get disconnected from your own business now that 'you are a the boss'. Stay involved as long as you can. Work harder than your employees. Be emotional and inspire your employees with your dedication. The spark will eventually jump over and the productivity increase can be enormous. Make your work place 'cool'. Create an environment people want to work at. If employees wake up in the morning and really like to come to work because they enjoy what they do, you will definitely benefit from it. And keep in mind - you need all the help you can get when competing with the market leader. Be the employer of choice.

Be the star in your community. The place where you start your business can be the founding place of the next 'business empire'. People are proud if one of them makes it to the top. Remember Johnny Carson? He gave back to the community where he had grown up. Nobody outside of that local area really knew about it or had paid attention but the locals - they admired Johnny Carson and were thankful supporters. Keep this in mind when building a business. You might become as big as other market players, but doing good is not a matter of how many millions you have. On the other side - you do not want to build a business just to make $30K per year. Your goals should go much further out and higher. Try to be the best in your field. The sky is the limit.

Use technology. Technology can be your friend. Small businesses can respond much faster to market trends than the big guns. Be innovative. While you're the small guy you can use this to your advantage. Being small is no excuse when it comes to using sophisticated technology. See the advantages of what technology can do and put away with the whining about the next upgrade coming soon. As long as you calculate it properly and make your case, you can most likely provide a quick ROI (return on investment).

Of course there are many more things that come into play in regards to business success. The steps outlined in this article however will give you a good head start when working on strategic placement of where and how your business should start. Good Luck.