Taking a business from an embryonic idea on a scrap of paper to a growing, thriving entity is one of the most exciting things you can do.
Watching it crumble to pieces as customers leave and profitability shrinks is one of the most heartbreaking things you’ll encounter.
Business is, by its very nature, a rollercoaster ride.
You started out with a brilliant idea. You thought you had it all planned out. But it didn’t work. Your last business failed. Too bad. Time to pick yourself up.
Ask any entrepreneur how they achieved success and they’ll tell you they learned from previous mistakes. Your last business was a mistake. Maybe not the idea, but the reason it failed was because you made one or more fatal mistakes. Ergo, it was a mistake.
You’re capable of building a thriving business, and I’m here to help you do just that with 5 simple ways to prevent your next business idea from failure.
Let’s dive in…
1. Create a budget from the start
Don’t listen to the countless people who’ll tell you that a business plan should be your starting point. It shouldn’t. You’ve got an idea and, unless you need oodles of finance from a bank, that’s enough for now.
Start with a budget. Forecast every income stream and expense for the next three years. Having a handle on your numbers from the start will put you in the right mindset and ensure you have a financial plan going forward. Few business fail when they’ve got a solid budget to work to.
2. Borrow the absolute minimum required
Some business ventures are lucky enough not to require assistance from banks. Freelance writing, sports therapist and business consultancy are examples of small business ideas which need minimal equipment and infrastructure to get up and running.
If your business requires stock or premises, don’t be tempted to splash out with the aid of a big loan — it’ll always come back to bite you. Borrow the absolute minimum you require.
3. Don’t fall into a marketing blackhole
We live in a very different world now when it comes to marketing. The days of intrusive, expensive advertising are slowly dying. And that’s a brilliant thing for consumers and — yep — you! It means you don’t have to spend a fortune on per-per-click ads or industry magazine editorial.
Focus your efforts on content marketing, social media and email marketing. There have never been so many opportunities to market a business with a zero budget.
4. Listen to more than one customer
Small businesses are, generally, pretty close to their customers. While that can feel all warm and lovely, it can also be a business killer. If you spend too much time with one customer, you’ll end up building your products and services around them, thus neglecting the wider market.
Listen to all of your customers and continually perform market research.
5. Take risks
We’ll end here, because it is the hardest task of the lot. At times, taking risks may feel like flirting with failure and that’s absolutely what you’ll be doing. Avoid taking risks, however, and you’ll never know what could lie on the other side.
Occasionally, you’ll need to trust yourself and go with gut instincts even if every other datapoint and colleague is telling you otherwise.
Follow the tips above and your next business will have a far greater chance of succeeding. You’ll need a dose of lady luck, too, but I firmly believe that, if you’re willing to mix risk taking with common sense, she’ll reward you by occasionally touching you with her magic wand.