If you’re an entrepreneur, you have an unquenchable desire to create a startup business. You want to make something that’s yours, that you can run the way you see fit. You’re passionate about it. You might have already done it multiple times and are looking to do it again.
But no matter how great the desire and enthusiasm, your business can still fail.
Creating a business is an art, as we like to say, and just like with any art, a business can be poorly crafted. There’s technique and training involved that separates a painted masterpiece from a five year-old’s crayon drawing.
So how do you make sure your business is on the masterpiece side of things? A good place to start is by avoiding the most common mistakes that lead to startup failure.
No Market/Oversaturated Market
Business 101 teaches us that every product needs an audience. And yet, time and again, businesses try to enter either an overstuffed market place or they create a product for a group of people that doesn’t really exist.
This is one mistake that will always end in failure. If there’s no one to buy your product, you will not sell anything. And if you don’t sell anything, you will fold.
That’s not to say your business has to be wholly original. Sometimes, it just has to be different enough. After all, Facebook launched into a world where MySpace already existed. On paper, the two sounded pretty similar, but in execution, they were worlds apart.
On the other hand, you have something like the Microsoft Zune, an MP3 player that tried to go toe-to-toe with the iPod. If you’ve never heard of the Zune, well, there’s a reason for that.
It starts with seeing a need. Next, you assess how big that need is and what other businesses are currently trying to meet it. If the need is strong enough and the competition is weak enough, you just might have a starting place for your business.
If you are new to business or product development, before you spend too much time and money on your idea, you might check out Pat Flynn’s book Will It Fly, the subtitle of which is “How to Test Your Next Business Idea So You Don’t Waste Your Time and Money.”
If you’re good at something, don’t do it for free, as the old saying goes. But where do you draw the line? Crafting a price is an art in itself. Charge too much, and no one will want to pay you. Charge too little, and your business will sink very quickly.
These days, it seems the latter is the more common problem. Many modern businesses develop out of an idea that’s great, but they pursue it without any plan for making money. Your end goal might not be to become rich and famous, but you still need to make money.
This is especially true for companies that get investors.
Startups, particularly in the Silicon Valley area, have been exploding with multi-million dollar investments, only to go under a year down the road because they weren’t making any profit.
Even if you’re not taking investment money, your business will only last so long if you’re not bringing in revenue. To do things right, you’re going to need to map out your costs and expenses. You’ll need Key Performance Indicators (KPIs) to set actionable objectives as well as forecast growth and sustainability. And you’re going to need to make some charts.
It might not sound fun or “cool”, but that’s what it takes to get your business to a sustainable level.
Let’s say you had a great idea for a business. Better yet, you came up with a plan on how it can be profitable and sustainable. Now comes to the time to let that business out in the world. Everything should be good to go from here, right?
Unfortunately, a lot can go wrong at the beginning. As great as your business plan might be, it’s fair to say it will go through some adjustments once you start executing it. If you ignore the problems or take too long to fix them, the whole thing can quickly fall apart.
Similarly, if you have a product that you’re selling, and the initial version of it has unforeseen problems, this could obviously lead to some serious issues.
Sooner or later, you have to put your business out there, and you have to accept that you can’t account for or predict everything, but it’s crucial that you make sure your product or service is as ready as it can be. Making a poor first impression can be a very difficult thing to change down the road.
Learning to Paint a Masterpiece
Want to learn more about crafting your vision, forming your strategic plan, and ensuring success in a business? Pick up a copy of the Business is ART book today. Want more hands on coaching? Visit the contact page here and let’s start a dialogue.
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