Every year, thousands of Kiwis start new businesses, all with a vision of helping people and having more time, more money & more freedom.
But globally, twenty percent of businesses fail within the first two years. And right here in New Zealand, 40 percent of small businesses don’t survive to celebrate their fifth birthday.
So how can you make sure that yours isn’t one of them?
The statistics are scary, particularly if you are just setting out on your business journey. Nobody wants their business to be a flop.
What goes wrong so often, and what can you do to set yourself up for success?
Let’s look at some of the key things you can do to help your business survive for the long haul.
How To Build A Successful Business From Day One
1. Solve a problem that people are willing to pay for - the graveyard of failed businesses is full of great ideas that no-one wanted to buy.
No matter how good your product or service is, if it’s not solving a problem that people will pay for, then you don’t have a business, you have a hobby. It’s even better if people consider the solution you’re offering as a “painkiller” rather than a “vitamin”.
To make sure you’re solving a problem that people are willing to pay for, do your homework before you invest lots of money or toss in your day job.
Talk to your ideal customers, run some trials and get feedback. And a quick note on product feedback, family and friends are not always the most reliable source. Especially if they feel there is a risk they might hurt your feelings or appear unsupportive.
2. Get the Right Advice – while there are a number of reasons that businesses might fail, often it comes down to making bad decisions.
A staggering 46 percent of start-up failures are caused by lack of knowledge or not fully understanding the situation! You make all the decisions and have the ultimate responsibility for the success or otherwise of the company. So, it’s up to you to make those decisions as informed as possible
There is a lot to know when it comes to running a business and no one person can possibly be an expert in every single area. Sometimes it’s what you don’t know (or what you think you know) which can trip you up. If there are areas you are not clear on, don’t sweep them under the carpet – get advice.
While Google can be helpful in some circumstances, I wouldn’t recommend relying on the top ten search results when it comes to the unique needs of your business. Your foundations need to be a lot stronger! Getting help from an advisor early on in your journey can make all the difference.
Many factors may tip the scales of your business – from a lack of capital or poor planning, to cash flow problems and bad budget management. All of these issues are avoidable with the right knowledge and advice from the get-go.
3. Be clear on why you’re in business - from recruitment and employee engagement to marketing and business growth, the “why” of a business plays a crucial role.
Consumers prefer to buy from companies with a strong purpose, and top employees are attracted to companies with a solid vision. But beyond this, your “why” will keep you going when times get tough.
Make sure you have a “why that makes you cry” – a vision and purpose so clear and compelling that it drags you out of bed on cold, gloomy mornings and acts as a beacon to guide you through the rough days.
Launching and growing a business is not easy. If you are in it for the money, you might end up bailing out during a storm before you get a chance to reach treasure island! However, if you have a bigger purpose, you will have the drive to push through and find the success you deserve in the long run.
4. Prioritise profits – one of the biggest reasons businesses fail is that they don’t become profitable quickly enough.
Profit is often viewed as a dirty word, but there is nothing inherently bad about making a profit. With a profitable business, you can help your customers, employ people in your community, and support charitable or social initiatives. Plus, your taxes help build better schools and hospitals. How is that bad?
You wouldn’t work for someone who doesn’t pay you. Why should it be any different just because you also happen to own the business?
There are many levers which will influence how quickly your business becomes profitable. Knowing which levers to pull and in what order can significantly impact your likelihood of success.
5. Invest in Coaching - champions are shaped by more than just raw ability and a desire to succeed. They are shaped by their coaches!
There is a reason that top sports teams, and athletes never go it alone. If you want to do well at something, invest in coaching. It can absolutely transform you and your business.
Firstly, accountability is essential. When you own a business, you often answer to nobody but yourself. This can be dangerous if you are prone to self-doubt, indecision, or procrastination.
A business coach motivates you and makes sure that you do what you say you will. They will help you set smart, realistic goals for your business, identify what will make the biggest difference, and inspire you to take the actions to achieve them.
If you lack confidence, a coach provides you with a sounding board and practical support as you step out of your comfort zone and try new things for your business.
A good coach is supportive without being a “yes-person”. They will tell it like it is and give you tough love when needed. Coaching helps you focus on the right things in the right order, giving you clarity and direction.
Ready To Build A Successful Business?
Building a successful business is daunting prospect, and the statistics can be offputting, but look at the other side of the coin! Sixty percent of kiwi businesses make it longer than five years. With the right support and advice, yours can be one of them.
If you are ready to set your business on the path to success - whether you are just starting out or have been operating for a while - then I am ready to help you make it happen.
More than just an accountant, I can offer real and practical advice that will set your business on the path to success from day one. Book a free discovery call with me today to see how I can help your business.