Startup failure is not unheard of. It is rather the expected and it is reported by....that 90% of startups fail within their first year in business.
The key takeaway in failure is to understand some of the lesser known reasons for the failure and to be able to press on with new ventures differently for a better chance of success.
If a business is going to be a success, the entrepreneur must take into consideration, a number of factors. Any of these factors may be important. There are a number of questions that may help to turn your idea into a success.
Your Business Idea
Some basic questions about your business idea include:
What business are you entering?
What exactly will be sold?
Can your idea be developed?
Is there a market for your idea?
Can you identify a target audience?
Is your financially feasible?
Can your idea be protected?
The Market
When thinking about the market you are entering, consider the following:
How many similar products exist already?
What are the strengths and weaknesses of the competition?
Can you identify a gap in the market that your product can serve?
Marketing
Pricing for the market is critical.
What price can be charged?
Is it possible to undercut competitor's prices or would you sell initially at less than unit cost until the product begins to sell well?
Can your business compete in some other way, such as advertising? (There are many marketing experts who argue that every product has a unique selling proposition {USP}). Your business could identify this and promote it.
People
Identify the human resources that your business would require.
What are the main skills needed to run the business?
What skills are needed to manufacture the product?
How can your business attract workers without suffering from a high staff turnover?
What can you put in place for retention of your staff?
Are you familiar with workplace legislation?
You will also need to take into account, the health and safety of employees.
Finance
What does your startup cost look like? You will need to identify all costs related to setting up, i.e, rents, wages, machinery, sales and distribution, legal and professional fees etc. How much are you able to invest? How will you fund your startup?
Over and above the initial investment, how much more will be required before cash flows into the business? What other sources of financing is available and can be used?
The Product or Service Offered
Is your product or service ready for sale in the market?
Is your product in line with environmental protection legislations?
Can you protect your product idea by patent or copyright before production takes place?
Is your product cost effective? You may want to consider the way in which your production is done, the location and the materials to be used. Each of these will affect the cost and speed of production.
Risk, Timescale and Cost
Consider the main risks involved in your business venture. Can they be reduced in a timely manner? And if so, how?
Try answering the above questions to get an idea of your Entrepreneurial mindset and positioning.
Do you need help reducing your chances of failure in business?
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