The business landscape in America has gone from the Age of Manufacturing to the Age of Information. Now we’ve moved into the Age of the Entrepreneur.
Each year, more individuals choose to forgo the secure paycheck but restrictive environment of the corporate world to strike out on their own. The American Dream has existed as long as our country has, but there’s never been a better time to pursue it.
Forbes says that a staggering 500,000+ new companies emerge each month. But you’ve probably also seen the dark underbelly of this shiny surface. According to Bloomburg, eight out of 10 startup businesses fail within the first 18 months. That stark reality can give even the most passionate entrepreneurs cold feet.
However, saying that these businesses “fail” may not be completely accurate. Inc. estimates that 90 percent of those that don’t survive actually commit suicide. The founder or founders get bored, neglects their homework or succumbs to self-doubt. For these and other reasons, their companies simply don’t go the distance.
Have you been nurturing a great idea or product that you’re ready to bring to life? As the saying goes, forewarned is forearmed. Knowing the odds of going under can help prevent you from becoming simply one of those statistics.
Before you drink the startup Kool-Aid, review this checklist for some valuable tips to help you become part of the two percent of success stories.
- Do what you love. If you put money ahead of personal satisfaction, sooner or later it’s going to show through as a lack of sincerity. You’re going to put in an incredible amount of time and effort. Why would you want to do that for something you’re not really invested in? For example, a tech startup may sound exciting and lucrative, but if computers bore you to tears, you’ll be doomed.
- Have a business plan. Yes, you’ve heard the stories of the hotshots like Mark Zuckerberg and Steve Jobs who just jumped right in and made it up as they went along. That’s still the exception, not the rule. You don’t need a comprehensive document that crosses every “t” and dots every “i”. What you do need is a financial blueprint that outlines factors including estimated costs, revenue projections and a break-even point.
- Know what sets your product or service apart from others. Have you ever watched Shark Tank, the TV show where budding entrepreneurs make their pitch to potential investors? One of the first questions that always comes up is, “What’s different about your company?” The number of businesses entering the marketplace means that competition is tougher than ever. You have to know exactly what need, want or problem your product or service will solve for a customer.
- Be flexible. Conditions in today’s business world change almost daily. Don’t be so in love with your own vision that you can’t adapt in order to satisfy your customer base or take advantage of a new opportunity.
- Underpromise and overdeliver. New business owners often get this backwards. They’re so anxious to get those first customers that they promise the moon and get in over their head. If you make modest but solid promises and extend yourself to go the extra mile, you’ll look like a hero.
- No man (or woman) is an island. Whether due to lack of funds or excess ego, many entrepreneurs try to do everything themselves. No matter how intelligent and capable you are, you’re going to have areas of weakness. Don’t be so proud that you won’t get help where and when it’s needed. You might satisfy your self-esteem, but your startup will pay the price.
- Don’t be paralyzed by mistakes. Everyone makes them. You will too. What’s important is that you learn from them, readjust your course and keep going. Too many people end up throwing in the towel. Strive for perfection, but don’t give up when you hit those speed bumps.
You can join the ranks of entrepreneurs who make it past that 18-month deadline to build a successful company. Balance your enthusiasm and passion with a clear-eyed sense of reality and you’ll join that two percent.