Being an entrepreneur is one of the quickest thoughts which comes to the mind of a young person when thinking about a career. However considering the risks and challenges which comes with starting a business — most are unprepared for this challenge. Many people believe that because someone else succeeded in being an entrepreneur — it simply means “I can also do this business, and succeed.”
Do we take a critical look at the risk associated with being an entrepreneur?
20% of small business fail in their first year, 30% of small business fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.
Okay, I know, you have all seen these studies over and over — and yet — have you seriously considered the consequesnes?
A quick review of 2011 business startups by the United State Department of Labour shows:
- 4 percent made it to the second year
- 3 percent made it to the third year
- 9 percent made it to the fourth year
- 3 percent made it to the fifth year
To create a business that will strive and stand tall, you have to ask the killer questions yourself. Scientists are used to hypothesis-driven research where hypotheses are formed then experiments are designed and executed.
The same approach applies in this context, using a good killer question to frame the hypothesis around the most likely reason a business will succeed even at the down times.
What business “killer thoughts” should startups consider?
Flexibility to Innovations
Businesses take various trends from time to time, from the era of door-to-door marketing — and now to the stage of digitalization. Swift change response to these innovations is key for startups to consider when thinking of starting a business.
Too often the CEO stands up at an annual meeting and says, “We need to be more innovative,” and then goes on to the next topic. For Startups, Innovation takes time, energy and money. You need some freedom and time to think and tinker around with new possibilities.
You also need new skills and systems that support thinking and collaboration. Innovation is critical to the future, but it depends on the investment of today’s resources.
Check out blockbuster failure to adapt to innovations and how it cost them a lot.
Are you trying to be a Batman or Superwoman?
Taking a perspective look into unknown territory is what establishing a business looks like. Expecting to see all just at that view will keep holding you back. As a business owner, you will be faced with many setbacks, so instead of taking all on yourself to solve alone, leverage on the brainpower of your employees and co-founders.
It’s important to know the difference between collaboration and consensus when seeking opinions from employees and management. You’re not necessarily looking for the most popular opinion or the one that comes from your most senior employee. Instead, you’re looking to source as many opinions as possible before you decide for yourself.
When you find yourself trying to be the Batman or Superwoman you are attempting to solve all problems yourself. Remember the great words from Hellen Keller “Alone we can do so little; together we can do much more.”
Low Self Esteem
You may have low self-esteem when you don’t value yourself as much as you should. You tolerate unhealthy situations and people. You consistently accept low quality and failure.
No one needs to settle for a dimmed existence due to a lacking sense of self-worth. Many business startups individuals can buy into thoughts that there is something wrong with them. Some feel that they, personally, are somehow inadequate, not good enough and not worthy of being a competitor. These negative thoughts will steal your will to win and compete; you will need confidence as you access all the good things that life has to offer.
When you tolerate abuse (or misuse) it can cause you to fail to reach your full potential in life. For new business startups, having low self-esteem is a liability and can be a killer to your business. Work on your self-esteem issues, if you have them, before you try to start a business.
Ignoring the Babyboomers
One major reason many startup to fail in their second and third year is due to lack of recognition of their first customers. Those customers are often the baby boomers who trusted even when they didn’t really have a reason believe in you and your business. Ignoring these customers people can kill your business.
Maybe you are looking for the millennial or those you think may be more unique or snappy — but often the boomer will be your main customer. They may be the main people who can give a testimonial to your services.
The boomers are also the ones that are often trusted with the reviews for the new customer. Ask the boomer for reviews about your services — they genuinely want to help you and will follow through with a recommendation. Use them for your major source in a referral campaign and thus helps your business to grow as quickly as possible. Nurturing these people will go have a lasting impact to keep your business in existence.
Shrinking away from the wholesaler is one the riskiest move Dell made. This, in turn, led to a huge drop in their revenue and thus losing much to other competitors in the field.
Overthinking of the Big Success
Having the mind of being a successful entrepreneur is good. However, overthinking of the big success is not. Some of the entrepreneurs who fail have been thinking of growing big and yet have put little action to work.
Some become lost in thoughts of living a dream life. Putting your mind to reality and sticking to the work is what stands as the main challenge to most people. Overthinking your big success is also called “analysis paralysis” these days. The strategy needed to run a startup is often quite different from what needed when you get big.
The bigger the business, the bigger the challenges. Why spend more time thinking of the big success? Keep transforming your thoughts into positive action. As an entrepreneur, you can’t overthink things — you must be making a decision and go with it and doing the actions.
Power of Foresight
The immense uncertainty that today’s business startup face is something truly unique. We’ve been living with uncertainties forever.
What’s new is structural uncertainty. It is structural because the long-term, irresistible forces now at work can explode the existing structure of your market space or your industry, putting all you have accomplished at risk — or drastically diminished.
You need to translate your foresight into the analysis as to how your business can keep standing. Take cues from other business in your space and stay ahead in technology.
Handling Negative Criticism
Criticism is a natural part of the business. If no one is criticizing your business, then you are not doing the business correctly. As a business start-up, much of what ultimately happens is out of your direct control. However, look around and see if you can see what others don’t and anticipate the unexpected. As a startup you will find ways to influence outcomes that benefit those you serve.
Sometimes critics can actually have valuable advice, even if they frame it in a rude way. You might not like to hear complaints, but they might help you improve your business.
One great way a start-up can handle criticism is cross-selling or upselling. That one rude individual that doesn’t like this burger — doesn’t necessarily mean they won’t like another type of sandwiches available.
Great leaders at this digital age still face negative criticism and still handle it with top-notch ideas without losing their heads. On a second look — criticism is good for business.
Final Thoughts
Often times we think the cause of failures for startups is the borrowing of money, or lack of proper planning. We may think that failure is a lack of competitor analysis and inadequate demand for goods and services. This can be quite true, however, certain thoughts and doings which occurs in the mind of a startup entrepreneur are enough to kill the business.
Just as the famous Chinese philosopher Lao Tzu said: “Watch your thoughts, they become your words; watch your words, they become your actions; watch your actions, they become your habits; watch your habits, they become your character; watch your character, it becomes your destiny.”
