Every serious life project always starts with more than just a conversation. From getting married and starting a family, to switching jobs. Whether the life project are happy decisions or not. Like divorcing.
The same principle applies with entrepreneurship. Whether it is starting alone, or with loved ones. Deciding and committing to it takes more than just a mere conversation.
Whilst discussing business and startup ideas with friends can be thrilling, it’s essential to consider the realities of starting and building a company. Kicking off is not as glamourous as it may seem.
It is important to understand that starting a company is the easiest part. Building and sustaining it are the real challenges. According to statistics, 90% of new businesses fail within the first five years.
Hence the question…
Why do so many new businesses fail?
The reasons are many, but some of the most common ones are:
- not prioritizing sustainability
- poor handling of finances
- rifts between partners
- lack of research
- poor marketing
- lack of expertise
- remaining rigid
These are all critical factors that must be considered when starting a company. Obviously, many other things have to go right for a new business to thrive and succeed.
So how can one make sure not to encounter failure within the first five years of a new business? Let us go through each point of the list previously mentioned.
Business sustainability is more than just a conversation
This is essential in building a successful and long-lasting company. The very essence of each business is to last. Losing sight of that elementary principle equates to unrolling the red carpet to failure.
So how can one ensure sustainability of their business? Simple.
By incorporating sustainable practices into your business model not only helps protect your business and market environment.
Also, by reducing costs, by increasing efficiency, and enhance your brand’s reputation. Reputation can be through quality, through customer service, etc. Reputation is everything in business.
Financial management
One of the most common reasons for business failure is poor financial management. This emphasizes the need for a solid business plan and a thorough understanding of finances.
Managing cash flow, tracking expenses, and seeking funding when necessary are all critical components of building a successful company.
Finances are the blood of a business. The whole point of financial management is to avoid running out of funds. In essence: no financial management, no business.
Research
It is crucial to have a strong understanding of the industry and the problem you are trying to solve. Doing your research will help you understand the challenges that the business may face.
This requires conducting extensive research to identify market needs, customer pain points, and potential competition.
Research also involves understanding your strengths and weaknesses; and seek out partners or team members who can complement your skills.
Cohesion between business partners
This subject makes me smile… Why? Because I have witnessed many people from the African community being obsessed with their titles… “Pastor”, “Mrs” (for real), “Doctor”, etc.
The reason I brought this is simple. When starting a company people focus too much on the idea of being called a “founder” or “co-founder”. Just for fame and recognition (shaking my head).
The truth is that this pride is delusional and means nothing if no value is being created. Focus on bringing value and solving problem, and fame will follow.
The subject of pride brings me to my next point, which is…
Beware of rigidity
You know, one of the way ways to identify a lifeless body is its rigidity… Yes. The second you become rigid, and therefore not flexible, your business is dead. Why?
Because staying rigid in your approach can lead to missed opportunities and ultimately hinder your company’s growth and success.
A crucial factor in building a successful company is remaining flexible and adaptable to changing market conditions and customer needs.
The business landscape is constantly evolving, and businesses that are willing to pivot and adjust their strategies are more likely to succeed.
Expertise
A lack of expertise can cause the rigidity I previously mentioned. Indeed with the always evolving market and customer needs, it is essential to catch up with expertise.
Customers come to your business because of your expertise – amongst other reasons. If you lack expertise, what kind of business would you run on the long run?
Therefore, surround yourself with individuals who have the necessary skills and expertise to bring your business vision to life.
Marketing
It is important to have a strong marketing strategy that reaches your target audience and communicates the value of your product or service.
Without effective marketing, your business may not attract enough customers to generate revenue and to grow.
The success of a business is more than just a conversation because…
Starting a company is just the first step in a long journey. Many things have to go right for a business to sustain. This is why building a company is hard.
Why? Because it requires a lot of hard work, dedication, and perseverance. Basically, it is not just about having a good idea. It is also about:
- Executing the business plan properly,
- Optimally managing it finances,
- Having the right resources (technical, material, etc.)
- Performing the appropriate marketing,
- Continuously innovating and / or improving.
In order words, it is important to focus on creating value rather than focusing on the idea of fame and glory. The right mindset and approach can turn your dream of starting a company into a reality.
As this post is coming to an end, I’d like to ask for your opinion. Is starting a business more than just a conversation? If yes, do you see any other aspect one has to consider when starting a business? Which ones? I’d love to read your thoughts in the comment section.
This post aimed to remind to every dreaming entrepreneur that entrepreneurship is more than just a conversation. Feel free to comment and share.