Over the last decade I have met a lot of business owners and entrepreneurs in all kinds of industries. The overwhelming majority of them no long exist. Many of them share a common mistake that will set them on the path to failure before they even start.
“According to Dun & Bradstreet reports, “Businesses with fewer than 20 employees have only a 37% chance of surviving four years (of business) and only a 9% chance of surviving 10 years.” Restaurants only have a 20% chance of surviving 2 years. Of these failed business, only 10% of them close involuntarily due to bankruptcy and the remaining 90% close because the business was not successful, did not provide the level of income desired or was too much work for their efforts. The old adage, “People don’t plan to fail, they fail to plan” certainly holds true when it comes to small business success. The failure rate for new businesses seems to be around 70% to 80% in the first year and only about half of those who survive the first year will remain in business the next five years.”
What is one of the main contributors to this crisis of small business failure?
The truth is that the majority of these businesses have failed before they ever started. They are consumed and focused on the wrong things.
- Business name
- Product creation
- Business plan
- Marketing (with a wrong emphasis)
I’m not saying these things are not needed. But what I am saying is if you are going to start a business or you have already started a business you might consider your priorities differently.
Too many businesses start at the five questions above, and what I’m proposing is that it’s the wrong order or prioritization.
When you focus on those things you unintentionally are setting the stage for failure because those things don’t matter. That’s putting the cart before the horse.
What you will do is put yourself in a place of mediocrity. You will be doing what everyone else is doing. You will sound like just like your competitors sound.
There will be lots of pressure to fit in and settle.
Your marketing will be boring, uninspiring and bland.
Your strategies will be non-existent.
And if the averages are right, the probability of your business surviving is very low.
What Process Should a Start-up Company Really Follow for Success?
If you want to stand out, you have to do the hard work of thinking about your business. Here is the approach I take with my coaching clients who are starting businesses:
#1 Create the foundation of your business:
- Why do you want to start a business and how will your business change or impact someone’s life?
- What business are you “really” in?
- What are the tangible values people experience through your product or service?
- What “specific” problems are each tangible value solving?
- Who are you “specifically” solving them for?
- How are your products or services a part of the solution?
Check out the short video below titled “5 Questions That Will Transform Your Content Marketing Overnight”; in it I will lay out the five questions you will need answer to satisfy a strong foundation.
#2 Think through and create the product or service with the customer in mind.
#3 Develop the initial systems and processes for each area of the company. IE.:
- Customer Service
#4 Create the strategies and goals for each area of the company.
#5 Administrative work (much of this happens simultaneously):
- Business Name
- Letters of Incorporation and set-up Government info (Tax ID number, state and local tax registration, permits, etc)
- Website Domain
- Website Creation
- Social Media set-up
- Business Plan (Remember, a business plan is basically for a banker and has no relevance if the work above has not been done)
- Location (if you’re brick and mortar)
#6 Pre-Launch Campaigns
The dangers of not following a process like this are real and the evidence supports it. If you get the cart before the horse your business is already failing before you’ve ever even entertained your first prospect.
When starting your business you to figure out what you should do from what you shouldn’t do. You cannot do it all. You have to grow into your business.
You have to start with a foundation. Way too many businesses start with a product. While every business needs a product or service to sell, the foundation is needed even more.
You can’t build a house (ie products) without a proper foundation. If you do, it’s sure to fall.
When you can answer in detail the questions outlined above in #1, it makes product or service creation easier.
Creating the foundation is a function of clarity and that is where the power of your business is at! If you understand your business and are very clear about your purpose, then the focus is easier.
Focus happens at #2 – #5.
Your Foundation is the Cause of Your Success
You might get lucky because you have such a unique and compelling product that it speaks for itself. But this is the exception, not the rule.
For the majority of businesses, the foundation is the real cause of their success. That doesn’t mean there won’t be failures. There will be; but if you know yourself, your business, your customers and prospects and what they need and why they need it… failure is not really failure. It’s just a setback to be overcome.
Just ask Steve Jobs, Bill Gates, Donald Trump, or any other highly successful business leader you know. They all experienced failure but they had a purpose and reason for being in business other than the obvious.
There was something that drove them to excel and succeed. I guarantee you that if I asked successful person the foundational questions they could answer each one without hesitation.
Unfortunately, the majority of small business owners cannot answer the questions; or worse yet they don’t value the questions and what they can do for a business when a business owner digs in and uncovers the answers.
Here is a real danger… if you don’t have clarity the minute you go online the technology will expose it.
If you have a question or comment, please leave it below in the comments section and let’s extend the conversation.
Here is my challenge to you; don’t settle for mediocrity and unnecessary failure!
- Do you want to be successful or do you want to be another statistic?
- Do you want lay the foundation for success and go the distance?
If so, consider looking into two programs I offer.
#1 – The Foundations of Internet Marketing is a 4-6 week course one-on-one with me. It’s very inexpensive and will help you lay that initial foundation.
#2 – Head to the “Contact” page and message me about how to help you as a start-up company build your plan from steps 1 – 7 above.
In both of these, I will offer you a free 60 minute consultation. There is no obligation or commitment on your part.
I hope to hear from you soon!!!!
~ Don Purdum