Finally starting your new business is an exciting time for any fledgling entrepreneur. All that hard work coming up with a concept, a product or service, acquiring the funds, finding a building to operate from, designing a logo and a website – it all finally coalesces into that glorious first day you can fling your doors wide and declare that you’re open for business.
However, while that moment may be the culmination of a great deal of hard work, it’s really just the beginning. Opening a business is relatively simple compared to making one a success. It is a sad fact that 20 percent of small businesses will fail in their first year, and 30 percent won’t survive to see their second birthday. However, the real challenges start further down the line – once the finance has dried up and a business is standing on its own two feet – with half failing after five years and a massive 70 percent not making it past the decade mark.
How, then, can your small business beat the odds and grow from a tiny acorn into a mighty oak – able to withstand good times and bad, and become a brand which will see you, your family, and your employees through to retirement?
Never forget what led you to start your business in the first place. We can all get complacent or bored in our jobs sometimes and think the grass might be greener elsewhere, but always try and keep going back to where you were when you started.
For example, the number one reason people give for starting their own business is to ditch the nine-to-five routine and become their own boss. Whenever you’re feeling unmotivated or like you want to throw the towel in, remember what it was like working for someone else and use that energy to drive yourself onwards.
Also, never forget to stay true the message of your brand. Sometimes, it can be tempting to try and be all things to all people, but this can often end up confusing your core audience. Find your niche and stick with it. People usually start a business to serve a market they themselves feel passionately about, so stick with what you know and drive it with the energy and enthusiasm which led you to start in the first place.
You must also have plans in place to evolve the mission as you grow, however. If your mission at the outset is to climb Everest, then you need to know what the new mission is once that’s been achieved. Focus on the present, but always be ready for what comes next.
This will be one of your biggest expenditures once your business is up and running and also the one which can lead to the most waste. The temptation is high to chase big wins in this regard and pour a load of resources into a wide range of channels.
However, it can be far more beneficial to adopt a “slow and steady” ethos and focus your efforts on smaller but better-qualified market segments. For example, if you’re marketing to a B2B audience, you’ll be better off focussing your social media strategy on platforms such as Linkedin and Twitter than Facebook and Snapchat. For B2C brands, the opposite will yield more satisfying results.
As a startup trying to survive those difficult first years, you want to make money as quickly as possible. However, pouring funds after prospects which are unlikely to convert could land your fledgling business in hot water before you’ve had a chance to look at the ones which are.
We’ve all watched those reality television shows where a struggling entrepreneur has remortgaged their home, maxed out a string of credit cards, and taken out personal and secured loans to prop up a business which isn’t growing or performing as they would like.
However, using loans to fund your business is rarely a good idea at the startup stage. Loans should only really be used to grow your venture once the concept has been proved. In other words, loans should be used to grow a business that is already performing well, not to bail out one which isn’t. Smart use of debt should be to invest in response to demand, not to test new ideas.
Use existing resources to discover what works and then use finance to fund a stronger execution of the idea.
When you first open your doors, it will more than likely just be you and maybe a partner or two running the business. However, the time will soon come when you need people with specific skill sets to help your business keep moving in the right direction.
Nearly a quarter (23 percent) of startups go under because they don’t have the right people in place, making it the third most popular reason for failure. While you might be wearing a lot of different hats at the beginning, you can’t be an expert at everything, and you will eventually need to start looking to hire a solid knowledge and experience base.
A good way to reduce expenses in this regard can be to outsource non-essential or one-off work instead of hiring permanent staff. This gives you the flexibility to use people only as you need them for specific jobs instead of justifying a permanent position for them.
Each person you bring into the fold will either strengthen or weaken your corporate culture and you must never be afraid to make the tough decisions for the health of your organisation. You want to find contributors who share your passion and excitement for the business, and you can’t be afraid to fire those who fail to uphold your values or perform to your expectations. It’s never easy to let people go, but the survival and success of your business is the number one priority.
Starting a new business is an exciting and daunting affair. However, with the right knowledge and attitude, you can soon see your tiny acorn grown into a mighty oak – one which will serve you and your people for the rest of your lives.
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