The prospect of starting a business is an exciting one. When it goes right, you get to be your own boss, do something you care about, and of course, make money along the way. That being said, according to Investopedia, 90% of startups fail. So how can you give your startup the highest chance of survival and success?
1. Have a clear plan
You've probably heard the saying "failing to plan is planning to fail", and that is especially true when it comes to startups.
Your business plan should at the very least contain:
- Details about your product/service
- Marketing strategy and analysis
- Financial planning and budget
- Company overview
A detailed plan will help you stay on track, and prepare for what's ahead.
2. Recruit the right people
In Jim Collins' book 'Good to Great' he writes that the people you choose to work with is one of the most - if not the most - important decisions you will make.
You will need to find people who care about what they are doing. Make sure that all people you bring on board also have the skills that your startup will require. Everyone in the startup should understand their role, what they are responsible for, and how they fit into the overall picture.
3. Study your competition
When you are starting a business, study the competition in your market/industry and realistically assess their strengths and weaknesses. You will need to know how you compare to your competition, and what your competitive advantage is (if you have one).
By studying your competition, you can also learn a lot about your market, your industry, and your potential customers. Your competitors can be one of your best sources for information, new ideas and inspiration.
4. Protect your cash flow
29% of startups fail because they do not have enough cash flow. Without adequate cash flow, a company will be unable to meet its obligations.
Make sure that you have enough cash flow coming in each month so that you can pay your bills on time without overdrafting. Consider hiring an accountant to ensure that you always have a clear idea of your cash flow. There are also cash flow management tips to be found online.
5. Find good mentors
No entrepreneur starts off knowing everything. If there are mentors in your field, reach out and try to develop relationships with them. The challenges you encounter likely won't be unique, so it is important that you have experienced mentors who can provide guidance. In addition, having a mentor allows entrepreneurs to think outside of their own perspectives, which leads to better business decisions.
The Takeaway
Although you don't have to be an expert at everything before creating your business, the more you plan and the more you think things through, the more likely you will be to succeed. Be diligent with your learning, keep on improving, and both you and your business will get to grow.
Infographic Source: Moula
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