Most small business owners start their companies with the best of intentions. They are usually passionate about developing a product or service to fill a void in a particular marketplace. What happens between coming up with an idea and launching the company is where most business owners make their biggest mistakes.
In order to better illustrate the challenges of starting a business, picture yourself building a house. You wouldn’t try to do it alone, and you most certainly wouldn’t build a house without first drawing up a set of plans. You would hire an architect and a contractor, who would then bring in sub-contractors, to help get the job done. You would also allocate the proper amount of time and resources to do the job correctly. That being the case, why do people think it’s reasonable to invest their time, money and other resources into starting a business without fully mapping out what it will take to make their company successful?
Here are four areas that, with proper planning and regular review, would greatly increase the probability of success for startup companies.
Have a Vision – What type of business owner are you? It’s critical to know whether you are a small business owner, a passionate small business owner or an entrepreneur. When you come to forks in the road for your business—hiring new employees, opening a new location or investing in your company—it’s important to know which way to turn—are you gravitating toward entrepreneurship or small business ownership? Making the wrong decision can result in a heavy price to pay for your business.
Create a GPS Plan – Once you figure out the type of business owner you are and where you want to go with your company, you then need to decide how you plan to get there. Your GPS plan is similar to the GPS features on your smartphone. It should include all the areas of your business broken down by month and what you need to do in order to achieve your objectives at the end of the year. You also want to have a backup plan because there will be detours along the way.
Understand the Competitive Landscape – This is a big trap for not only startup businesses, but most small and midsize companies too. Just because you saw a void in the marketplace for your product or service doesn’t mean other people and companies didn’t see it too. You have to know your competition and what it will take to beat them. How does your product or service stack up against all your competitors? What is your USP (Unique Selling Proposition)? Are your customers buying your product or service for different reasons? The more research you do in understanding the competitive landscape, the better your chances of winning in the marketplace.
Pivot When Necessary – At some point in the startup phase of your business you will hit a dead end. Something you thought was going to work—didn’t! In order to get to the next level, you must be diligent in not throwing good money into bad opportunities. Today, more than ever before, money for startup businesses is tight. You don’t have the luxury of making numerous mistakes and calling it “education.” Cash is a finite resource. When your business runs out of it, and you can’t find anymore, you are officially out-of-business. I suggest having an extra pair of eyes on your business—be it a coach, advisor, attorney, accountant or a mentor. Often times they will see something you missed, or they will ask questions that you might not ask yourself.
If you are starting or running a small business, take time to do things right. Have a vision, create an operational plan, understand your competitors and make changes when necessary. If you follow these four steps, you will enjoy success and alleviate stress. Not a bad combination.