Articles that provide the reason for start-up failures are plentiful; and there are many websites that provide failure statistics. So I’m going to take the opposite approach. What are the top five ways to ensure your start-up has a chance to thrive.
- Control the emotion. Probably the most important suggestion is a contradiction. It is emotion that was critical in your creative thinking. It is this emotion that has set you on the path as an entrepreneur. However, un-controlled this emotion will be a liability. At this point, it served its purpose. Now move to the next level and become objective.
- Study your competition. What are their advantages vs. what are their weaknesses? As a new business, you will be required to, at a minimum match your competitors’ advantages. To win customers away from your competitors you will need to solve you competitors’ weaknesses, i.e. make your company a better alternative.
- Take the pulse of prospective customers. It is very important to understand your customers’ buying habits and changing desires. Without this information, you may develop products and services that do not align with the market’s needs. There is a high probability that time, money and resources will be wasted if this step is skipped.
- Assemble an all star team of experts. Success requires multiple disciplines, i.e. Legal, Marketing/Sales, Accounting/Finance, and Operations. If you cannot build the team immediately, seek an outsource resource for each area, to call upon when needed. The trick of course will be to understand when the resource is needed. An Accounting colleague once advised that often times he is asked to look at an established small business. “Most of the time when a business comes to me for help, it is already too late.”
- Develop realistic plans. Establish an annual business plan with a proforma financial plan. At the same time, develop key performance measures of success. These measures should be watched monthly as they will be the first warning signs if things are not performing to plan. This activity is very important. Not necessarily because of the resulting document, but more because of the process. Planning requires that you review all elements of your business.
As the business grows, so will the complexity of the business. More decisions require more analysis. The aforementioned activities will better prepare your entity to start operations.
What is your experience?