Fewer people are pursuing their small business dreams. According to Startup Muster, there were 12.5% less start-ups in 2018 compared to 2017.
It saddens me, but I’m not surprised. Scroll any business-related forum these days and there’s plentiful stories of cash strapped businesses desperate for advice to keep their business afloat.
It frustrates me, but there’s a huge problem in small business – too many are unprepared and miss the core fundamentals.
Just because it’s easy, doesn’t mean you should
The barriers to entry to start a business are lower than ever, but easy access doesn’t make an idea a viable business.
Many have been/are under a complete illusion thinking it’s easy these days to take a side hustle to a business not realising that over 58% of small businesses close in the first 5-years.
It’s simple. Be prepared and play the long game.
The 3 Ps – Preparation, Preparation, Preparation
There is no one-stop-shop with all the answers. Do the work.
Research extensively and formulate a plan. Not a business plan where you map out your penultimate first 5 years on paper, you need a strategy – what do you want to achieve and how will you get there? What do you stand for? Who do you want to reach and how will find them?
Answer these questions before you start a business – not when you’re knee-deep in debt and hope is all that’s left in the bank account.
Be realistic about what it takes to gain traction. Every day over 144,000 new domain names are registered worldwide. Every boy and his dog has a website, but that doesn’t mean they have a business.
The same goes for social media. Social media is a tool, not a strategy. The digital world is pay-to-play. How will you leverage this rented space? Think about the content you share. How can you add value to your audience? And how much are you willing, or able, to spend to do so?
On the matter of money, be practical. Few new businesses turn a fast profit. Realistically, it is 3-5 years before you’ll draw a basic wage let alone replace your previous salary.
Are you prepared to take that hit without borrowing against the business, or worse, mortgaging your family home? Remember, you still have to repay the loan regardless the revenue of the business. Be in a financial position to manage a worst-case scenario.
As well as playing a long game, prepare for a hard game. Your own business is a blessing, but it is brutal. Constant patience, resilience and lots hard work are required in spades.
And most importantly, educate yourself about the market you want to enter – do you actually have a minimum viable product?
Understand the fundamentals
Of course, seek help from others, but understand all aspects of your business first before you delegate. You don’t need to be an expert but know the terminology and data and how it impacts your business.
How can you expect to instruct someone else for a successful result if you have no idea what you need or what you want to achieve? Whether it’s your website, accounts, supply chain, social strategy or logistics, understand how it works – and be prepared to take the reign when things hit the fan.
These sound like such basic concepts, but so many don’t invest the time to get it right from the outset. Long-term success is possible by being prepared. Get the fundamentals right from the beginning and the sky is your limit.
Sonya Michele is a Premium member, scarf addict and the founder of dog&boy – a premium fashion accessory label that’s worn and loved worldwide. When she’s not creating beautiful scarves, Sonya enjoys mentoring upcoming designers and inspiring fellow business owners. Sonya has been featured on SBS Small Business Secrets, and recently written for Dynamic Export and Inside Small Business, who named her one of Australia’s Top 50 Small Business Leaders for 2019.
Premium members can connect with Sonya here.
Article first published on Inside Small Business, republished with permission.