Business failure is a major fear most entrepreneurs are facing especially those who are about to get started.
Someone who is starting out on a new business venture or looking for a startup will expect some failures and bumps in the road. Failure isn’t necessarily a bad thing.
Like anything else in life, it gives us invaluable experience, giving us the opportunity to learn from our mistakes and to improve ourselves.
In fact, founders of previous startups that have failed have a 20 per cent higher chance of success on their next business venture.
We are the sum total of our experiences, so every experience must be taken in step.
How, then, can we founders and entrepreneurs do all we can to promote a successful and profitable business?
Here are seven handy tips for empowering your future business now.
1. Establish a business model and a business strategy.
Elon Musk did not just wake up one day and say, “Hey, today I want to start a groundbreaking and high-impact electric car company.” Far before that, he planned a meticulous roadmap.
He quietly published his master plan in 2006, well before the first-generation Tesla Roadster was successfully released.
Tesla’s founder, SpaceX, The Boring Company and Neuralink carefully developed a business model long before either of these companies were created, just as you would.
2. Lay your preparations bare
Preparation is the key to starting any company. First you have to concentrate on the front end (marketing, word of mouth, sales, etc.) and then find the back end – whether that’s something you’re going to deal with.
Often arranging for someone else to manage your business ‘back-end services and logistics (partners such as Amazon or Shopify will save you both time and money) makes sense.
This is especially the case if operating your own back end is highly capital-intensive. As an aspiring entrepreneur, you need to focus not on logistics or clerical work but on your strengths.
You may also plan these campaigns in the form of presales and waitlist.
Presales have become increasingly relevant in today’s business climate, and will significantly improve the chances of future success.
Recently, Harvard Business Review found that companies that employ substantial presale strategies could yield an additional 6-13 percent in increasing revenues.
So, aim to plan seriously ahead of any major product or service launch, whenever possible. Take Robinhood, Tesla and Honey as examples: ahead of any product releases, all three of these companies can create significant demand.
If premarketing is a strength of yours, expand on that to generate demand.
3. Start slow-keep the overhead low and develop the principle of proof.
Everyone wrongly takes the quote from John Maynard Keynes (“we are all dead in the long run”) as a short term endorsement.
Nonetheless, instead of waiting for events to fix themselves naturally, it’s more a suggestion that we act now. Entrepreneurs always have to look to the future, but more importantly, you have to start the actual phase of creating your company.
Start gradually, but notwithstanding. Create a checklist for what you need to do, and complete every task one by one.
If you take things every day, you’re less likely to feel stressed and feel more productive.
4. Proof your idea when holding a full time job.
Each hungry entrepreneur I’ve ever come across has taken the view that they have to abandon everything they do and dive headfirst into their latest business venture.
I strongly advise against this particularly in the early stages. You don’t have to quit your day job to become a businessman.
If anything, the chances of success are higher if you iron out the startup’s kinks while maintaining other sources of revenue.
5. Fund with your own money at first
There are untold ways to fund your business when you start. But, where necessary, it’s important that you use your own funding.
Mark Cuban and Richard Branson also believe that you don’t need a massive amount of money to launch a business venture.
Most proof of concepts have very small criteria for capital expenditure and therefore it is much easier to have some skin in the game by using your own funding sources.
Otherwise, you’ll be left to respond to investor demands as soon as you’ve found your company, which might lead to your business going down.
6. Incorporate the logical thought and decision process to include a scale of preference
One way to develop your decision-making skills effectively is to bring all decisions into the context and structure of the cost of opportunity.
Any and all can be put within the context of what I would term “opportunity cost decision making.” If you are a master of financial services and sales, you shouldn’t devote most of your time and effort to learn how to code and create websites.
That ought to be common sense, but many young entrepreneurs are trying to juggle so many things themselves.
If you’re not good at designing the web, recruit or outsource someone to do it. If you’re spending your attention on the stuff you’re best at, your company and startup will be better for that.
If I can attribute everything in my life to improving my decision-making capacity (in terms of managing an employee team, competitive advantage, marketing outlays, customer demand, etc.), it will integrate the cost of opportunity into my decision-making.
7. Avoid Marketing Mistakes
I can’t emphasize enough: untested, unproven marketing can result in your downfall. I know from experience that marketing fumbles can eat up your sales, so there is always a risk to trying a new strategy.
This does not mean you can ignore creative marketing strategies, but when contemplating new marketing campaigns, please be careful.
One blunder could damage your bottom line greatly, and bring your company down for months.
Go what does! It’s cool to create a creative and fresh marketing strategy but never give up the bread-and-butter marketing for a shot in the dark.
Wherever you’re in your phase, you need to continue and prepare somewhere, even if that means taking baby steps. People don’t expect to fail; they just don’t expect.
Take it day by day and the larger picture will finally shape on its own. When you follow these instructions, you’ll have an easier way to go than I did on my first attempt. Rome wasn’t built in a day and neither will it be your business.