One of the most shocking statistics I have come across regarding small businesses is that a bit more than 50% of small businesses fail in the first four years. Out of every ten new startups today, in the next five years, only five of them will remain. Man, if you are a business owner and you are reading this, do not fear! We’ve got this under control.
One of the major things that people don’t talk about as regards why Startups and small businesses crash is a problem from the start. Just like building a house, if the foundation is faulty, no matter what you build on it, it’s definitely going to crash. A ‘foundation’ problem. The beginning phase of a small business is very very important and it cannot be over-emphasized.
With that said, you’ll agree with me that, the things you put in place before building business matters for sustainability. If you are thinking of building a skyscraper, you cannot use the structure of a penthouse. The deeper your foundation, the higher you can build.
The Right Mindset
Take this from me, never start a business you are not willing to stick with for at least 5 years. I see lots of entrepreneurs make this mistake, they are in it for the quick money. Wait, Tobi! Are you saying we shouldn’t go into business for the money? You definitely should except you’re running a non-profit organization, but do not let money be your ‘primary’ goal. What drives a business isn’t money, it’s the value you provide to customers, for example, you have lots of money to pump into your business and no one is buying the product.
You’ll make money quite alright but the reality is that money is just an end product of you providing value to specific sets of people. No value, no money. More value, more money. So a company’s growth is stunted when they stop increasing their product value. A major problem begins when your customers are getting used to your product/services. There’s got to be something you are adding to the product regularly to give your customers a different experience.
To be profitable, be value and customer driven. Never put yourself first but the customer and provide the best solution you can create for them as regards your industry.
When you carry this mindset, you will always come up with solutions inspired by your customers and in turn, they buy it. I wish it can be as simple as that! You need to devote time to creating a bond between you and your customer. All these will be taken care of if your business motive is Value First.
Because it is value first, you grow with your customers and vice versa. The value will be what drives you to do more. Nuff said.
Have a Vision
Typical right? Most people don’t even have a clue. How can the blind lead the blind? Actually, the blind can lead the blind – only but a little while and they all fall in a ditch somewhere at some point. What is your end game? What exactly do you want to set out to achieve? For me, it’s to reduce the Start-up mortality rate globally. If you possess a genuine vision, most of the time, it’s backed up by passion – an attribute needed to keep forging ahead in business. Your vision helps you know the right set of deliverables and the manner you need to deliver them. Having a vision can also be a competitive advantage as no two companies can have the same vision. Hence, it helps carve out
Your vision helps you know the right set of deliverables and the manner you need to deliver them. Having a vision can also be a competitive advantage as no two companies can have the same vision. Hence, it helps carve out the difference in approach and delivery of products/services. Do you want the honest truth? , you will not go far without vision. If you do have a vision for your business, you are safe. Well, if you are reading this, and you are an entrepreneur without a vision, you are not safe. Now, I am not talking about your plans, I’m talking about the end picture you envisage. If you don’t have one, it’s quite easy.
Write down the results you want your business solution to bring about in years to come – and follow through with it. You should not be at the center of your vision, you should take up the role of an enabler. Have it memorized and write it somewhere you’ll see regularly. Every morning, I do this, I refresh and think about the real reason why I’m doing this, then I draw an inference from my vision.
Establish Market Need
Is your product is demand? It’s funny how as entrepreneurs we suddenly get an idea and instantly, we conclude that it’s a marketable and in-demand product. Sometimes, we get so consumed and bask in the love for our idea that we fail to put in the reasonable amount of market research as regards the product before launching. I’ve not seen anything that can cripple a business like a product not having people who need it. It kills businesses so fast… in the blink of an eye, Bam! The business is gone. This right here accounts
This right here accounts for over 40% of why businesses fail.
- Let’s talk about how to determine if your product meets the market.
- The Industry is saturated: Are you in an industry where you have really high competition. If you are, that’s an obvious head start that point to how lucrative the business is. Competition is a good thing.
- Get 3 people you know who needs your solution to patronize you. If you can get these people to pay you, then more people can pay you. Get acquainted with your audience. Go meet them and if you can, offer your services. Use them as a test and improve on your product.
Ask! One of the easiest solutions ever. Do a survey and ask your target audience if they will pay for your solution.
Being sure that there’s market for your product is really important. Do not build your product and wait for the market to come but instead, build a product for the market. This is a sure formula for making money in business.
The right team
Your business success lies in the hands of people you recruit into your business. And you’ll do yourself a great deal of good by ensuring you carefully handpick the right set of people at every point in time. The people you bring into your business must be people whose goals align with the company vision and values. Not every qualified person fits into your company’s vision. Hiring the right people usually is a bit stressful because the most qualified candidate is probably looking to receive a monthly salary higher than what you’ve reserved. So in that case, you need to switch
Not every qualified person fits into your company’s vision. Hiring the right people usually is a bit stressful because the most qualified candidate is probably looking to receive a monthly salary higher than what you’ve reserved. So in that case, you need to switch to engaging them, selling the vision to them and making them understand the benefits of working with your company. Nobody gets it right at first, but hey, you’ll figure it out.
Before you start recruiting make sure you carefully state the work that must be done by these people, this will help you know the kind of people, skills you need to employ.
Errrm, nobody gets this right at first. Your first sets of the team members will definitely not be your last. For starters, just make sure the people who you hire can get the job done.
Ability to deliver value
So, I’ve seen a lot of businesses market different products and do have the infrastructure to deliver a professional service. Nothing kills a startup faster than this. When starting out, one of the ways you will grow faster is by getting people to give you referrals. But how will you do that if you don’t deliver excellently?
Ensure that you have everything in place to give your customers a superb service when starting out. What I teach people to do is to under-promise then over-deliver. A typical example will be delivery time, so you tell your client you are going to get the job done in 2 weeks but you deliver in 10 days or less. It just speaks volumes about you and the business. You will easily get people to like and refer you because most businesses don’t over deliver
Create your Business model
A business model outlines how exactly you intend to deliver your products effectively to your target audience. It’s a document/statement that you go back to from time to time to keep updating and tweaking. A business model helps you better understand your business and how to make it profitable. It talks about everything you should be doing in your business. It’s more like your map which you keep referring to for directions.
These are the necessary things I’ve found to help me with a good start. I’d like to know what you’re currently doing (or did) that gave you fantastic results in the comment section below