The stats are in. Business success is tough. According to the The Start-Up Genome Report 90% of start-ups fail in the first three years. Despite all the spending, despite all the shows like Shark Tank, the reality is many of the start-ups are devoid of business nous. For every stock market darling, those businesses placed on a pedestal even though they aren’t turning a profit, there are countless others where the founders are struggling to feed themselves. While this has long been my thoughts, the reality is that is backed up by the research.
It isn’t enough to have an idea. The reality is simple. You must create a customer. A customer who desires your product enough to pay for it, OR their pain, of the problem you solve, is enough for them to pay the relative value you place on the product. Until this happens you have an idea, not a business.
One of the first things I deal with new businesses is to build commerciality early. Get a sale, create a customer, get some success and it builds from there. Early wins helps build sustainable results.
How do I know if a business succeeds?
Steps to Take to Business Success
- Do your research. Understand what the market is doing and where it is heading. Understand your target market and what they will pay for the product?
- Create your minimum viable product and refine the offer.
- Determine your message and test, test, test.
Ultimately, you need someone to trust and help you in these key areas. A mentor can help you define the actions needed to take you through the process of taking your start-up to survival. Survival means a simple equation. Your cash inflow must be greater than your cash outflow. Your cash flow includes sales and revenue, and the problem we see with many start-ups is the concept that commercial sales and top-line are almost immaterial. And PROFIT, almost a foreign concept. However, newsflash, for 95% of the businesses out there need to make a profit.
Creating a business relies on having sales, having customers and, believe it or not, making profit. If you do that in the first three years, you’re a good chance of having your start-up move to survival. Business success awaits, get the right advice, do the work, an idea by itself won’t do.
Tony Curl is a business coach, advisor and mentor that can help you do the sums to see if your business idea has legs. Contact him today and let’s get your idea moving.