Strategies For Launching a Successful Start-up

Here’s a nice bummer statistic to start things out with. 80% of new businesses fail within a year-and-a-half. That’s 8 or 10 in 18 months, folks. This stat should be a scary warning to anyone who fancies him or herself an entrepreneur. But these odds don’t afflict businesses at random. In fact, there are plenty of reasons why businesses fail, and why others succeed. If you are about to embark on the path of business ownership, it is vital to look carefully at the path before. If you understand the following principles intimately before you open up show, you stand a much greater chance of being open two years from now.

• Understand Your Role in Your Industry. This is true no matter what your industry is. How much market share are you competing for? How does your local market intersect with the international industry, and how much are you fighting for space in both? How do other businesses in your sphere remain profitable, and how will you mirror their successes while innovating upon them? What shouldn’t you do? Why do others fail where you hope to succeed? If you have a crystal clear objective, you will be more likely to succeed. Some businesses open with no clear idea who is going to buy their goods or services. While the “build it and they will come” idea sometimes works, it’s much better to build something that is desired and vitally necessary to which people will flock in a predictable pattern.
• Understand How You Will Operate Your Finances Ahead of Time. Is this something that you are going to do on your own? Will you hire someone else to do it? How much will that cost? Do you understand all of the relevant tax laws that you must operate in accordance with? I recommend getting small business accounting software right out of the gate. You’ll put in all your contacts, make record of all your deadlines, have your various accounts visible, control payroll, and basically just make sure all your money is in the right place at the right time. And that you have enough of it. Many small business owners make the mistake of thinking that because things are new and relatively uncomplicated, they can handle their books mentally, or with a few notes made here and there. It’s much better to start with a program that can grow with your business. My keeping careful record of all of your finances when things are easy, there will be much less chance to mess things up later on.
• Prepare For the Worst. Look at your business plan objectively. You may be describing how your business will operate in a perfect world. What happens if things go wrong (as they always do)? What happens if you get sued? What do you do if supply doubles overnight? What do you do if you suddenly lose your biggest account? By being prepared for these inevitabilities, you will make your life a lot easier in a moment of crisis. Of course, no amount of preparation can protect you against every eventuality, but being prepared for some will help you a lot.

There are many other things you learned in business school to make your new business a success. Maybe you didn’t go to business school. Whatever your knowledge, it’s best to prepare more than you think you need to, before opening up shop. So take a class, do your homework, and ask colleagues how they do what they do. It’ll save you a lot of trial and error and make you much more likely to be a long term success.