A 20% chance of success…would you take that bet?
Only 2 out of 10 new businesses
Although starting any venture is risky, here’s three ways you can beat the odds and make it past the two year mark.
#1. Start Small
So what do Apple, Microsoft, Amazon, and Google all have in common? They all started in a garage.
Many dream of being the next Steve Jobs , Bill Gates, Larry Page or Jeff Bezos. And maybe you will be someday. But you probably won’t get there by trying to be the next Google.
These innovative entrepreneurs all had amazing ideas – but they didn’t rent office space to “start” their businesses. They didn’t take out huge start up loans before they got off the ground. They bootstrapped and struggled, and started as micro businesses.
Maybe your idea is worth millions – even billions. But take a lesson from the biggest startup founders on the planet. Don’t start your business by pretending to be at a level you’re not ready for. Start small, at the lowest level possible, and build from there.
#2. Bootstrap First
When starting a new business, your first thought may be “how can I get startup funding?”
Perhaps a better question would be “What can I do to avoid huge business debt?”
The simple answer is bootstrapping. Even if you believe you have a million dollar idea, you don’t necessarily need a venture capitalist, a bank, or credit cards to start your business. Instead, you can find a way to fund your idea in a non-traditional manner. Even if this choice delays the growth of your business, or limits your initial success.
Bootstrapping is choosing to trade services or buy used. It’s starting small and using the profits to fuel growth, not reaching out to investors. It’s deciding that DIY is better than plunging into long-lasting debt. There are a million ways to bootstrap a new business. It’s more of a mindset than an actual business management technique. It’s understanding that you always have alternatives to debt. You may have to be inventive and imaginative, and work a little harder. But it’s a better choice than long term debt.
When you take out large loans, you have to cover your overhead plus loan expenses. When you’re struggling to pay rent and keep the lights on, you don’t want to spend all your profits on your start-up expenses. If you want to avoid becoming the next business failure, dodge debt like it was the plague.
#3. Validate Your Business Before You Start
You think your idea is brilliant.
So did every other entrepreneur who started their business over the last few years. But 80% were completely wrong.
To tell whether or not you’ve got a great idea, you have to validate your overall business concept before you invest your life savings and thousands of hours of your time. If you have a product or invention to sell, build a minimum viable product. Get feedback and test sales in a small market. If you have a service, offer your service free or for a reduced price. Again, get feedback. Based on the reaction you get after testing, you either move forward, redesign or start over from the beginning.
This can be heartbreaking. Especially when you’ve worked so hard to create your first product. But remember this – Edison made over ten thousand prototypes before he succeeded. Hopefully it won’t take you that long before you get your business plan just right. But skipping this step s
You don’t move from the starting line until you have a product or service that your market needs or wants. Again, don’t try to start at a level you’re not ready for.
Be a Business Owner – Not a Former Business Owner
No one starts out with failure as an option.
They all have glorious entrepreneurship dreams. Their goal is to beat the odds, and every single one of them believed they could overcome that. But millions of entrepreneurs never make it to their 2 year anniversary.
In a culture that’s built on innovation and independence, you may look at the so-called overnight successes and say “I could do that too”. And you probably can – in the right circumstances and with the right plan. But there is no such thing as an overnight success in the business world. Successful, confident entrepreneurs just make it look easy.
To be one of the elite 20%, you have to plan ahead. You have to look at all the possible reasons why you could fail – and make plans to prevent that from happening. Too many times entrepreneurs get over-confident, because they know they could make their business a success.
Instead, you need to avoid every business pitfall right from the beginning. You need to start at the lowest level possible, and take on the least amount of money. You need to test your business plan, and throw the whole thing out if it’s not viable.
Don’t leap blindly into a new venture. Instead, slowly inch into business ownership. And with a little luck, you’ll blow by your two year anniversary and will never look back.
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