In another post, I explored the 7 things you absolutely must not do when starting a business. Today, let’s turn around and examine 7 business startup secrets that will reduce your chances of failure in the first year of business. These are critical factors for you must implement to ensure successful business startup.
1. “Put all your eggs in one basket and then watch that basket”
To recap on last week’s point #1, it means that you have no plan B. You have no escape hatch. You have no parachute. Make this decision the moment you decide to go into business and you will have taken your first big step into success.
In one of the world’s classic motivational programs, Lead the Field, Earl Nightingale teaches that you should not have another option. You should put all your eggs in this one business and then watch that business.
Many people would call this ‘madness’, but the reality is that when you have too many business ideas running at the same time, you spread yourself too thin and lose focus.
Wait until you’re become a savvy and successful business person before adding another business, and another one…
For now, stick to creating one business and working on it for 3-5 years before taking on something new.
2. Get very clear on your business idea before setting out
Once you’ve put all your eggs into this one business basket, you’ll need to decide which business to into (if you don’t already know). Clarity of vision before startup is critical for the success of your business.
Sometimes the first business idea may be the best; sometimes a little bit more market research on your idea will show you which way to turn or how to tweak your idea into something better; and sometimes you may need to abandon that idea and pick a new one.
You need to fall in love with your business before you see it in reality.
You will spend a lot of time in your business and expend a lot of energy, emotion and logic, not even thinking of the extra time and physical labour you will have to put into the business so you might as well be doing something that you love.
Depending on your budget, you may need to do everything in your business on your own before you can afford to bring in people to help.
And even in businesses that require outside help, you will need to start as lean as possible in terms of employees and increase the number of employees as demand rises.
3. Have enough funds to cover your personal expenses for at least 12 months
This is one factor you cannot afford to miss out if you want to quit your job and go fully into business.
Most employed people don’t understand just how draining a business can be if you get into it without money for your personal needs. For one, they’re used to a salary at the end of the month, whether they do their best or not.
In business, you determine your income on a month by month basis and there are no accolades when you perform well.
I remember asking one of my clients how much money she needed to run her life per month and she said KShs. 50,000/- from the top of her head.
So I asked her to track her expenses for 2 months and record where each shilling that went from her pocket, bank account, MPESA, salary, etc went.
She was surprised at how much she actually spent per month and this made her realize that she wasn’t ready to quit her job yet and she had to rethink her business model and create a feasible exit strategy from her place of work.
Quitting your job to go into business without having taken care of your financial obligations for one year is like digging yourself into a very deep hole that will be hard to get out of.
The biggest dream killer is running out of money for personal expenses while trying to maintain and build a business. Take your personal financial concerns out of the picture and you will have enough energy and time to grow your business.
If you’re out of work, I suggest you take up a part-time job or get a full-time job and start the business in your free time.
If you’re working and still want to spare more time for your business than your current job allows, try to work out a reduced work-pay plan with your employer so that you become more of a consultant than an employee as you ease out into your own business.
However, this can only work if you’ve been an exemplary employee and your skills are essential at your place of work. Most of all, start saving extra today. Save, save, save and then save some more before you quit your job.
4. Have a mentor, coach or accountability partner
Not having someone who understands the business scenario and who can guide you and work with you as you learn the business is a sure way to slid into failure.
A mentor will help you avoid the pitfalls of the business and s/he should be someone who has been in a similar business and is willing to share their experience and guidance. S/he should also be someone with integrity such that they will not steal your ideas and run off with them.
A coach will help you stay on the path and work with you to keep you focused on what is important despite the drama that life may bring to you. They will help you get clear on your idea and work towards achieving your goals.
An accountability partner is someone you trust who can be your sounding board. This could be a relative or friend and it should be someone who tells you things as they are and who is not afraid of telling you the truth that you are avoiding.
Remember to keep your ideas to yourself and only share with your mentor, coach, accountability partner or people who support and motivate you.
If you are as lucky as I was when starting this business, you can get a coach who is also your mentor.
My coach and mentor, Eileen Laskar, helped me get very clear on my business idea and shared her experiences with me in a way that helped me avoid many mistakes that I was ‘planning’ to make within the first two years in the business.
Being my mentor, she gave me the push that I need when she suspected that I was procrastinating or scared of taking a challenge.
I never thought I could write an article each week until she challenged me when she realized that I was scared of going online and getting known by people out there.
That week, my coaching homework was to create a website, write 3 business articles and post them on the website.
Eileen sets such a high standard for her clients that there was no way that I was going to go back to her without having done all this.
I remember sitting down for 5 days, feeling sorry for myself as I wrote the articles and created the website and feeling like dropping out of the coaching but knowing that she would not allow that, so I had to do it…
Within 2 weeks, I had created my first website from scratch, written 4 articles, posted them on the website, found a free online contact and newsletter management program and created my mailing list. T
he articles for that assignment later turned into an eBook entitled, How to Choose the Perfect Business for You.
This eBook set the foundation for the Create Your Dream Business coaching program.
In 2014, another coach challenged me to write my first book and I took the first 12 modules of this coaching program and turned them into a self-coaching manual titled 12 Weeks to Startup. This book has been selling online from May 2015.
All this happened from a simple push by my coach.
5. Conduct a personal analysis
You need to identify your strengths, weaknesses, experience, education and skills/talents that match with the requirements for the business.
Identify the areas where you are strongest and find a business that relies on these strengths.
You will also need to find ways to mitigate your weak areas and lack of experience, skills and training, but the main focus should be on working with your strengths as opposed to trying to overcome your weaknesses.
As your business grows you can outsource the parts you don’t like doing or hire personnel to help you out.
Also note that your own personal development is a must. You can lead only as far as you have grown as a person.
6. Conduct your market research
This is a must do.
Once you have identified your business idea, you need to find out how viable this idea is, whether there is market for it, how large the market is, and how much people are willing to pay for your products or services.
You will need to identify your niche and find out how many players are in that niche and what they do.
We are lucky today because the Internet allows us to conduct research from the desk or phone.
One thing that you will need to check is whether there are many players in the market.
I’d be wary of a first-time entrepreneur starting off with a business idea that has no current players in the market as you would need a large budget to sensitize the market before starting to sell to them.
I know that Bill Gates did it, but then how many people have been able to do the same?
Competition is good because it means that people are willing to pay for that product or service. You just have to find a way of making sure that your product or service is unique enough so they pay you and not your competitors.
If you can, get a part-time position in a business that is almost similar to yours, but not directly in your line (they aren’t your direct competitor) so that you learn firsthand how the business actually operates.
Theories about a business and real life experience working in a similar business are distances apart in terms of providing you with information and skills that will help you build your business.
7. Be willing to be on the front line, especially the front of the firing line
If you don’t like taking responsibility when things go wrong in your life, then business is not for you. Being a business owner means that you will be on the firing line more often than you expect.
You are dealing with a species that has no predictable behavior model no matter what psychologists tell us. This species is called Homo sapiens and it’s a very paradoxical species.
You can never predict accurately how humans will act and sometimes you will get shocked by the kinds of behavior exhibited by your clients or customers – people you thought were sane and adult…
Starting a business is very exciting and seeing your dream come to fruition gives immense fulfillment. But even as you do the hard work of setting up the business, you must learn how to also take time to relax and smell the roses.
A lot of professionals are workaholics in their jobs and they take this tendency into their businesses. Sometimes the business becomes the main focus of the person’s life because the success or failure of the business is a very personal issue.
Being in business is lonely and you may find that there are very few people who understand you, who understand what drives you and the new mindset that you have acquired as a business person.
So learn to take time off and have fun before you start the business and make sure that you keep to this after you start the business.
Most of the great ideas that you will have and solutions to challenges that you are facing will come when you are relaxing, not when you are worrying about them.
Now you know the 7 things you must do and the 7 you must not do in order to have a successful business startup.
Take time to read through these two lists, work them out in your business, and you will be way ahead of even established businesses in your niche.
I’d love to hear your thoughts on the lists and any additions from your experience so please share in the Comments.
Note: This article is extracted from my book 12 weeks to Startup: How to Turn Your Skills, Talents, Knowledge and Experiences Into a Business and was previously published on www.newdawnsolutions.net.
Image credit: Stuart Miles at www.freedigitalphotos.net