Insights
30 Years :: 30 Lessons :: Lesson 2
EIGHT OUT OF TEN NEW BUSINESSES FAIL DON'T HAVE TO FAIL WITHIN 18 MONTHS
According to Forbes, eight out of ten entrepreneurs fail within their first 18 months. This, however, does not have to be the reality. After hiring my first employee, I quickly realized that I had more to learn. I was asked to join the Entrepreneurs Organization (EO) in my early stages of growth, and it was a tremendous source of support and knowledge.
The premise is that it doesn't matter which industry you are in—to avoid the typical pitfalls, as a business owner, you need to focus on the following areas of expertise otherwise, you are simply rearranging chairs on the Titanic.
- Finances: How are you going to make money?
- Strategy: What is your plan to maintain your business?
- People: Do you know how to manage employees?
- Sales: How are you going to sell consistently?
1. Finances:
First and foremost, you need to make a profit and have a continuous revenue stream and a plan to make it through the hard times. Don’t overspend but also don’t forget that in order to make money, you have to spend money. You will go crazy if you think small by saving pennies. There is a cost of doing business. Understand your cost and be realistic with yourself and your expenses.
2. Strategy:
Strategize how you will build your company and what your human and physical resources will look like. Understand that roles and responsibilities will overlap and that you will be involved in nearly every part of the process at the beginning. Yes, you are there to lead, but you must nurture your startup and create expectations for company processes, culture, and results.
My agency was built on customer/client service, so I was involved from the beginning in company communication in order to bolster my reputation and create a precedent of what clients can expect when working with us. I had slow growth with a goal in mind to strategically hire five to seven employees and garner a location in Rochester and Detroit. Those goals came to fruition through my strategic process.
3. People:
The people you bring onto your team must be versatile, bringing different skills to the table while understanding and conforming to the company’s mission. Diverse skills and backgrounds will allow for a wide variety of unique ideas and innovations to come to the table.
Make sure that your team is your greatest advocate and truly believes in what you are trying to build.
4. Sales:
Your product or service must be unique and perfect for the market. You need to have a sales process that is reviewed and refined to make the necessary adjustments for continuous improvement. You have to keep up with and understand how to price your product and/or service. Business Forward recommends when looking to set a price, ask yourself about the basic cost, desired profit, competitor pricing, market trends, and what customers would pay for your product/service.
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