The first few years are often the most challenging for many new businesses. A significant number of startups usually fail within the first year alone. Below are 7 things that you can do in order to enhance your chances of success while avoiding the dreadful fate that is so often met by new ventures.
How to be Successful in Business
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Build Strategic Alliances
“Every mind needs friendly contact with other minds, for food of expansion and growth.” – Napoleon Hill, Master Key to Riches.
Strategic alliances represent a fundamental piece that must be in place before a business can experience exponential growth.
Such alliances may comprise of business partners, mentors, skilled employees, etc. There’s only so far that one can go singlehandedly. For instance, a dedicated entrepreneur could put in 15 hours of work each day, max out their physical and mental reserves, but end up with a business that does ten thousand in annual sales. While that may not a bad feat, it would not be possible to scale beyond that point.
Now, by adding the association of partners and skilled employees, the same venture could do ten times more in sales over a similar timeframe.
A strategic alliance creates a pool that is comprised of knowledge, skills, experience, expertise and energy of all the minds in the team. Such special resources can be drawn and used at will. For instance, accounting may be your personal weakness, but is the strength of another member in the team. Because of the strategic partnership, you would have to access such expertise. That is an advantage that is not available to entrepreneurs who are working alone.
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When planning, always overestimate expenses and underestimate revenues
Forecasts are often imaginary numbers that are created based on where a venture might be headed. The newer the business, the more inaccurate the numbers tend to be – given that there are little guidelines (such as past performances) to determine the future. And since many startups are not in a position to outsource such services to professionals, the people who end up cooking up the numbers are the business owners, who just happen to be very ambitious. A quick recipe for disaster is an ambitious financial forecast.
Planning business strategies which entirely rely upon the figures from optimistic financial forecasts is a detrimental mistake. Things don’t always go as planned in business; more so for a new business. You are much safer overestimating the expenses and underestimating the revenues, as it will help you prepare if such a scenario were to happen.
Being conservative does not mean that you are willing to accept the numbers; it just helps you plan how to cope with them.
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Do not wait to create a ‘perfect product’
Many entrepreneurs like to wait until every aspect of their venture is perfect before they start selling. The branding, the website, the team, the office, the chairs all have to be perfect. While that cannot be classified as a major offense (that’s if it is born out of concern for the customer experience), the problem is that striving for ‘perfection’ is an expensive endeavor that takes a very long time to achieve. Unless there is a sugar daddy who does not mind funding product development perpetually, the company will run out of capital.
It is advisable to first introduce an initial version of the product to the market. Although it would not be the final version, it would help generate sales and acquire feedback from actual customers. The feedback can then be used to develop the ‘perfect product’. Even Facebook and Google are still developing their products, what we are using are the imperfect versions.
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Sell a ‘whole product’
As discussed in A Strategy for Developing Products so good they Sell Themselves, the marketing messages of most companies and the end products which they deliver often vary a great deal.
Many marketers are outright liars and will say whatever it takes just to sell. In order to get one over such companies, first of all the products which you are selling must stay true to the marketing words used to acquire customers. Secondly, they must be ‘whole products’.
The whole product model was first introduced by Theodore Levitt in the 1980s, and explains that in order for a product to exceed the buying expectations, it must be augmented by a variety of services and additional features which are supplementary to the ‘core product’.
An iPhone is a whole product because besides the core functions such as being able to call, text and take photos, they come with many other additional features. For example, iPhone users have access to an app store with millions of applications, a voice controlled virtual assistant in case their hands are tied, a finger print sensor for security, unparalleled support at apple stores, etc.
Ultimately by owning an iPhone, you become eligible to many other supplementary benefits. A business that intends to be highly popular with its customer base should create and sell whole products.
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Love your competitors. And steal cues from them
Contrary to what many people think, the presence of highly successful direct competitors is a good thing for new businesses. Such competitors have been around longer and are likely to be more knowledgeable in almost every area. Scrutinizing their entire operations will give useful insights and enable you to build your business’ foundations around strategies that they already tried, tested and verified for you.
You can to study their operational procedures, monetization strategies, marketing approach, traffic acquisition, etc. For instance, if the competitor has been the market leader for the past 10 years and you establish that most of their growth is linked to content marketing; that means that the consumers who you are targeting respond to content marketing.
You can also study particular elements of their operations which are relevant to challenges that you are facing. For instance, if you are struggling to acquire traffic to your website, you can look at how they go about with it.
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Develop the habit of measuring everything
Developing a habit of measuring everything which you intend to improve is an important life hack – not just business. It is difficult to tell whether something is working without measuring it against the desired outcomes. Let’s take a non-business example.
If you just started working out and would so much like to lose 8 Kgs over a spell of 2 months; that means that you would have to lose 4 Kgs each month, and 1 Kg each week. Now, checking your weight measurements every week can enable you to foretell whether you are on course to achieving the 2 month goal.
If you are not 1kg lighter at the end of the week, then it is unlikely that you will meet the objective and therefore have to train harder. Measuring enables you to continuously make changes to the aspects that are not working so as to achieve the best possible results.
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DO NOT neglect your life outside the business
Starting a new business often calls on entrepreneurs to free themselves of all unimportant distractions in order to give maximum attention to the business. While such sacrifices are part of being an entrepreneur, I cannot stress enough how important it is to draw a line between the unimportant distractions, and the important ones which give meaning to life.
Family is one of them, as are close friends and personal well-being. Don’t ever let yourself lose touch with any one of them, that is not how to be successful in business.
Life is all about balancing. Rather than putting in 16 long and depressing work hours each day, you would rather work for only 8-10 hours, but have time to catch up with friends, go to the gym, hang out with your family, etc. And besides, a 16 hour day does not mean that you were working for 16 hours; the brain can only be at an optimum level for a fraction of those hours.
The quickest way to lose touch with those closest to you is by giving no attention to your life outside of work.
