A business startup should never be like a box of chocolates. You should always know what you’re gonna get. So prior to launching your business startup, earnestly perform your business planning and market research. It’s imperative! Preparation and due-diligence are your keys to eliminating those surprises which can cause business startup failure.
But when you DON’T get what you expect, you shouldn’t have to suffer business startup failure. Obtain and apply the tenacity needed to course-correct quickly. Or, capitalize on it when it’s better than expected!
The business startup failure rate
First, I need to state a fact: Most businesses fail. About 80% experience business startup failure within the first 18 months. This statistic reveals a sad deficiency – one which can be fixed.
Too many business owners presume that opening their doors for business is enough. They hope customers will find them on their own. But the notion of “If you build it, they will come” is misconceived, at best.
Many other factors also contribute to the terrible business startup failure rate. Lack of capital is a big one, for sure. But the primary cause of business startup failure is poor business plan execution.
What is a business plan?
Business planning is both formal and informal. Your business plan may be formatted professionally, written on napkins, or something in between. So what’s the difference?
Formal business plan
This is used to attract potential partners and investors, or to secure a business loan. Writing your formal business plan is always a great idea. So what should it include?
- The size of your opportunity
- The problem your startup will solve
- Your solution to that problem
- Your five-year cash-flow forecast
- Research data to back it all up
There’s an important use for your formal business plan – attainment. Write it in the active voice vs. the passive voice. This will exhibit your authority. And make it concise. Your formal business plan is your golden ticket to growth.
Informal business plan
Now let’s discuss your actual business plan – the one you’ll use for daily business plan execution. This plan is for YOU. It contains your strategies and goals. It also contains your thoughts and ideas. Evolution is inevitable, so keep it up-to-date to avoid business startup failure.
Your business plan is actually fiction. Some fiction mimics reality and may even come true, but nobody knows the future. Experiment and learn from each failure quickly. Look at failure as an opportunity to try something else. Failures lead to success, not business startup failure.
When failure occurs, update and evolve your business startup business model until you get it right. Evolve your plan of action.
Lay out a different course based on your new understanding. This is your proper mind-set!
The LEAN STARTUP philosophy
There’s a new entrepreneurial methodology called “lean startup.” It favors experimentation over elaborate planning. It prioritizes customer feedback over entrepreneurial intuition. And the design process is iterative instead of a “big initial design” approach.
The “lean startup” philosophy is based on what works vs. what doesn’t work. So it’s a wonderful method to avoid business startup failure.
Business plan execution
Risks, hazards and pitfalls exist throughout the business startup process. So study the cons of business before the pros. It’ll help you determine if business ownership is right for you in the first place. Business startup failure can be avoided altogether, if you decide the cons outweigh the pros. There are some great employers out there to work for instead.
Business plan execution takes time
Practicing careful strategic business planning during your business plan execution is paramount. You’ll do this over a great many months before you can get to the prize at the bottom of the box. Your prize may be financial freedom or a market-share milestone. It’s success, as you define it.
It’s a marathon, not a sprint
Patient due-diligence is the name of the game with business plan execution. You’ll dive into the nitty-gritty each step of the way. So maintain a marathon mindset and you’ll get through the difficulties one-by-one.
Expect the unexpected, which is cliche, is valid regarding business plan execution. It means to look at every angle and think of possible surprises. Know what to expect ahead of time so business startup failure won’t occur.
Shortcuts to quick success
Taking shortcuts and shooting for quick success is the more common approach with business plan execution. Business startup failure is the more common outcome. So please learn from this and plan to suffer through the difficulties without giving up. Your business CAN succeed. But you must do what it takes.
If you truly care about doing what it takes to avoid business startup failure, for as long as it takes, and you have the tenacity to stay on-track, you CAN beat the odds. Don’t worry about the business startup failure rate. It doesn’t have to affect you.
Stay dedicated, educated, focused and patient. Know what steps to take and how to take them. Put them into your business plan ahead of time.
Then, use every resource available. Perform research often in order to stay informed. Keep your focus on business plan execution. And always avoid distraction.
Sometimes you’ll find a better solution. You may discover a better plan. Use a formal process to test your new idea. Business plan changes should be the exception. Plan changes must be resisted.
Avoid plan-execution spin-out. This is my fancy term for losing your sight, losing your focus, and being distracted by your new ideas. Keep your eye on the ball! You’ve done your due-diligence already, so trust it and stay focused.
Yahoo Finance Marcus Lemonis interview
See business plan execution, according to Marcus Lemonis in this Yahoo Finance newscast.
Business startup series
I’ve recently written a series of posts which educate entrepreneurs who wish to launch a business startup. These posts provide you with the tools you’ll need to succeed. Below are links to each of them: