Thousands of people think of new business ideas every day, but very few get to realize those ideas and turn them into real businesses. What’s the difference between those who succeed and those who fail?
The answer lies in these seven crucial decisions that you have to act on. With the odds of success in new business already stacked against you, ignoring these seven actions will inevitably lead to a still-born business that will quickly get forgotten, while you would have wasted your precious time and money. These actions are what the majority of successful entrepreneurs I have spoken to attribute as being key to their success.
1) Set clear goals: your new idea is nothing but a fleeting thought in your mind. If you don’t act on it immediately it will melt away. Write down a set of goals that you want to achieve from that idea. Clear, ambitious and realistic goals set a destination for your business journey. Others, including new staff, investors, suppliers etc will see where you are going only when they understand your goals; otherwise it will be a struggle to get support if people don’t “feel” your mission or your idea has no meaning to them.
2) Identify your market: you know the product or service you want to supply. Now decide who will use or buy it. Select a market that needs and can afford your product. This calls for you to know the market very well and to understand the needs of the people in it. You should understand the problems that affect them so that your product provides a compelling solution to one of them. Too many people make the mistake of getting products first, then start looking for a market. The result is inevitably failure.
3) Raise capital: Every business needs money to pay bills, suppliers and salaries. Decide where the money will come from. Do you have personal savings? That is the best source of capital that will not give you headaches. Some entrepreneurs have managed to start-up by creatively getting funding from customers. If you can get them to pay first, you can raise the crucial start up money you need. Banks are a no-go for start-ups. Family and friends may help, although there is a risk of soured relationships if the business fails.
4) Build your team: you may be very good in your specialized field, but you cannot be good in all aspects of running a business. You need other people with skills and competences that will complement yours. These people will help you build a real business instead of you running around trying to do everything.
5) Start selling: in the end, your products and services have to sell for your business to make money. If there are no sales, there is no business. Your selling strategy will make a big difference between business growth and failure. You will notice that many people will be reluctant to buy from a start-up, so you need to come up with real value in your offering so as to attract good customers and gain market share. Your product must solve real problems that affect customers, and in a way that is better than competitors’ products.
6) Build the infrastructure for growth: many businesses get stuck in the “first base” forever. The business remains at the same level, supplying the same products and serving the same number of customers for a long time. The business is not able to grow because it is not structured for growth. It won’t be prepared for expansion, opening new branches, hiring more employees and decentralizing management. It is important to set up the infrastructure for growth, including documented business systems, as early as possible so you can take advantage of opportunities as they present themselves,
7) Adapt to change: customer needs, technology, and competitors all evolve, and the very success you achieve by making those first six decisions well could doom your venture to destruction. Unless you can adapt to those changes–seizing new opportunities and guarding against evolving threats–your customers will flee and your venture will decline.
If you want to beat the odds and win in the start-up game, you must make these seven vital choices the right way. Otherwise, you’ll let down yourself as well as your co-founders, customers, investors, and employees.
The BusinessLink team is working on two new handbooks for both new and existing entrepreneurs: “Start-up Toolkit: How to launch your idea into a business in five weeks” and “The Entrepreneur’s Toolkit: Five steps to accelerate your growth”. Don’t miss them when they come out on 1 October.
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