Thinking about starting a business?
That’s awesome. I guess you’ve got your bulletproof plan in place and are super psyched to get started.
You’re going to conquer the world and make a ton of money in the process, right?
Well, perhaps you will eventually, but first make sure you fully understand these six crucial truths about starting a business…
- Never start a business to get rich
It’s no secret that people start businesses for various reasons which is probably why many of them fail in the first two years. Statistics regarding startup failures I’ve read and came across in various white-papers and periodicals ‘claimed’ that 80% of startups fail within the first two years.
While I’m not going to debate the percentage – although I doubt it very much – I’m however going to tackle the most probable reason for startup failure.
The number one reason for startup failure is absence of the BIG and meaningful why.
Yes, you read it right.
What is the BIG and meaningful why?
The big and meaningful why is the foundation of a business success. It’s that thing you’re very passionate about and obsessed by…that thing, so close to your heart which you believe in with every fiber of your being. Now that’s the BIG and meaningful why.
If you start a business with intention to get rich and live a lavish life you will most certainly fail and end up being a part of the statistic I’ve mentioned earlier.
Before you get all jumpy, let me explain…
Starting a business is tough! I don’t care what you’ve been told or maybe even read, entrepreneurship isn’t for everyone. Not everyone is cut out for it and no matter what, many will never make it as entrepreneurs…tough luck!
When you start a business, you ought to be mentally and physically prepared to take the beating on a daily basis. On your entrepreneurial journey, you’re bound to encounter arduous challenges, setbacks and insurmountable obstacles, which if you don’t have the BIG and meaningful why will simply break you and make you quit.
I know, you may have heard me say it before ‘you can NEVER fail unless you QUIT’ but if you have nothing to hold on to when the going gets tough, you’ll have no other choice but to quit.
Don’t be a quitter, have the BIG and meaningful why before you start your business.
- Success doesn’t happen overnight
Every time I skim through TechCrunch, Entrepreneur, Inc. or any other similar online portal, I come across a story or two about some successful entrepreneur who’s made it big, practically overnight…only nothing can be further from the truth. What they show is just the tip of the iceberg, really.
Success – whatever your definition of it may be – takes a long time, ton of hard work, crazy dedication and unyielding persistence aka ‘staying power’. Of course, a bit of luck and timing helps as well but it’s not necessarily the norm.
With that in mind, you’ve got to be prepared to put in long hours and lots of hard work before you get to a stage where you can take a bit of breather, let alone feel the sense of accomplishment or success.
Early days, months and sometimes years of a startup are the most grueling as they are filled with arduous challenges, disheartening setbacks and seemingly insurmountable obstacles…so pace yourself and be tough.
- Partner can either make you or break you
If your startup or a business venture calls for partnerships e.g. you can’t do it alone for whatever reason and need a co-founder, be very prudent in how you go about selecting the right partner.
Business partnership is much like a marriage with exception of sex. With that said, you’ll have to find a partner who shares your values, ethics and buys into your vision. Someone whose skill set complements yours and doesn’t overlap. Someone who’s trustworthy, reliable and won’t leave you behind when the going gets tough.
Look for all of those qualities in a co-founder if you’re to have a shot at a successful partnership. Be sure to take your time and remain very vigilant for partner can either make you or break you.
- Your GTM matters more than your mother
No matter how good of a product or a service you may build, if your target audience don’t know about it, it will be useless…you might as well close the ‘shop’ and don’t bother trying. You must have heard and perhaps already know by now that ‘if you build it, they’ll come’ is only a myth.
So, to avoid any surprises and more importantly to ensure your target audience beat a path to your door once you launch your magnificent product or a service into the marketplace, you’ve got to build the winning to-to-market (GTM) strategy.
Your GTM is your sales strategy which describes in great detail how your company intends to roll out a product or a service into the marketplace. In other words, the winning GTM must comprise all of the key elements of your business e.g. target audience, product or a service portfolio, value proposition and of course, distribution channels.
- Know your funding options well
To get your business running and keep in alive you’ve got to have sufficient funds. The funds can come from various sources e.g. founder (bootstrapping), family, friends, investors etc. Knowing your funding options ahead of the launch is very crucial and here’s why…
If you as a startup founder or an entrepreneur value personal freedom above all else, perhaps the only viable funding option for you would be bootstrapping. Bootstrapping simply means that you as a startup founder or an entrepreneur will fund your business by yourself…with your own money.
If for whatever reason you’re unable to bootstrap your startup because you run a capital-intensive business e.g. manufacturing, production etc. or have used up all of your cash in the early going, you’ll have to seek external funding from family, friends, Venture Capitalist (VCs) or angel investors.
As far as the external funding is concern, your best bets would be family and friends as that would usually be in the form of loans without or with very small interest rates. Your absolute last funding option should be the VCs or angel investors because they are in it for their very own interest.
In other words, both VCs and angels will take lion equity share (sizable part of your startup) in exchange for the funds they invest in you. In addition to that, you would most certainly lose a fair bit of control over your startup and decision-making would no longer be centralized (with you alone).
In the long run, you could even end up working for them in your own startup…so be super careful and don’s sell your soul to the devil.
- Traction trumps all
Assuming you’ve taken into a consideration all of the previous points I’ve talked about here and have done everything right, unless you’re able to grow your business, all of what you’ve done thus far will be for nothing.
But how do you grow your business at this time and age?
Your business success or failure will be greatly dependent on your ability or the lack thereof to grow your business via the right traction channels. While there are few dozens of traction channels available e.g. SEO, social media (Facebook, Twitter, LinkedIn etc.), inbound marketing etc. you’ll have to pick and choose the most adequate ones for your business.
Selecting the most adequate traction channels is directly dependent on the nature of your business and your target audience. This simply means that you better know your business inside-out as well as your target audience. You’ll have to be customer-centric and market-driven if you are to successfully leverage the most adequate traction channels for your business.
Wrapping it up
A wise man once told me ‘whenever possible learn from the mistakes of other but don’t ever shy away from making your own mistakes, as long as you learn from them’. This way is way less painful and if you think about it, more clever.
Starting a business is far from easy, if it was everyone would be doing it. Although nothing can possibly prepare you for the entrepreneurial rollercoaster, once and if you decide to take the leap of faith, make sure you’re informed about all pros and cons beforehand.
Knowing these six truths is absolutely necessary but not nearly enough. If you’re really serious about starting a business and ultimately succeeding in it, I urge you to spend some time and soak up this totally valuable and actionable – no bullshit – content.
Was this article helpful to you as a startup founder or an entrepreneur? Write your comments below and get in touch via Twitter. If you’ve enjoyed reading this article, you may also want to read The 13 Top Reasons Why Startups Fail by Emma McGowan, a full-time blogger and digital nomad who breaks down the top 13 reasons of startup failure.