Staring any new business is a massive undertaking only for the brave. Whatever the scale of your venture it is likely to be an all-consuming life-altering passion, especially in the early days.
Sadly, many new companies fall by the wayside. The Small Business Administration says that only half of new establishments survive five years and two-thirds fail within 10 years.
For companies who take venture capital the numbers are even worse. About three out of four fail to deliver projected returns, according to research conducted by Harvard Business School lecturer Shikhar Ghosh. It’s a number that’s vastly greater than previous failure rate estimates of 35 to 30 percent, made by the National Venture Capital Association.
So what’s going on? Why do so many entrepreneurs have a hard time making it? Why do so many businesses fail?
First of all, launching any new business requires vision. You must have a great idea. You must have a dream and be prepared to hustle for it. Something that’s never been done before and you’ve identified that there’s a pressing need for it. Or maybe something that’s a definite improvement on an existing product or service. You know there’s a market for it, for sure, and you have built the better mousetrap.
This is the time, however, when many people, fuelled and energized by the excitement of creating their baby, rush right into it. They fail to plan which, in effect, means they can plan to fail. Their journey ends before it really begins.
That’s because any successful business requires much more than vision; it requires execution. You have to have a healthy dose of both. I don’t agree with the old saying that “ideas are a dime a dozen.” To me that denigrates the immense value of creative thought. But the underlying message is true.
An idea is worthless if you don’t know how to bring it to fruition, if you don’t actually implement all of the strategies that are needed to make it a reality. Many people fail to execute on their vision. They get stuck in “analysis paralysis” weighing up all of the pro’s and con’s before pressing the start button. Perhaps they never even get to press the start button because they want everything to be “perfect” on day one!
My advice is: don’t just sit there—do something. Your product or service does not have to be picture perfect from the very beginning. What you need initially is an MVP (a minimum viable product) and a clear roadmap signposting your marketing campaign and how you expect to gather traction. Along the way you will refine and develop your visionary product. Most products will definitely evolve and change once you are in the market and dealing with the real world environment.
So, put together an action plan. Make sure you have a good team to handle all aspects of a business. Understand your personal strengths and find others to complement your talents. Find people you can truly trust; people who are genuine team-players who will back you to the hilt.
Make sure you have a good profit margin (that may sound old-fashioned to many high-tech startups, but I’m a firm believer in making a profit). Make sure your product is viable and that there is a market for it. Make sure you have enough funding. And, of course, get your family and friends on board. You want their authentic support.
Be prepared to make sacrifices. Be confident. Have the strength of your convictions. Have a purpose. Move forward.
Vision is vital. Executing the vision is even more vital.
As one great writer put it: Definiteness of purpose is the starting point of all achievement.
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