Your Startup is Going to Fail. Here’s How to Fix it.
Talk to most startup founders and entrepreneurs, and they’ll tell you they’re building the Next Big Thing.
They’re going to change the world! They have the solution that everyone wants and just doesn’t know it yet! It’s going to be a massive success!
Um…… Really?
Here’s a truth bomb for you: in reality, over 20% of new businesses fail within the first year alone.
60% in the first 3 years and if you make it past that milestone, you only have a 9% chance of making it past the 10-year mark according to the UK office of national statistics for SME in the UK
Now, that’s not to say it can’t work. I know for a fact that it can.
I’ve worked closely with over 100’s of startup and micro-business owners over the years, and I’ve seen both success and failure.
Because of the experiences I’ve had of working with these founders, as well as more established entrepreneurs, it gets clearer to me every day that actually, yes – you can make your business a success.
You can build the kind of business that does highly meaningful work, and really enjoy the process, and make money doing it.
You can solve huge problems and make other people’s lives better.
You can turn your ideas into reality!
Your success (or failure) is entirely in your own hands. So why do businesses fail, then? Surely no one chooses failure.
Well, most companies fail because they make mistakes they could have prevented.
The good news is that once you’re aware of these sneaky mistakes, you can pursue success by avoiding them.
Navigating these mistakes allows you to work on things that create real value.
If you want to build a successful startup, here are the biggest mistakes you might be making and their solutions…
Mistake 1: Not knowing your numbers or the rules of engagement in business
“Business is a game, played for fantastic stakes, and you’re in competition with experts. If you want to win, you have to learn to be a master of the game.”
― Sidney Sheldon,
Starting out on the entrepreneurial path is a financial risk, and I don’t just mean potentially leaving paid employment.
You often have extensive setup costs, and cash flow – the speed that money is coming in versus how quickly it’s going out – is exceptionally tricky to get right, especially for those who don’t have a solid understanding of finance.
Even with the best planning, you may experience regular curve balls if, say, you have late-paying customers. This can not only affect the spending you had planned but even throw the future of your business into doubt.
There is no easy way to say this, you need to be a business owner first and foremost and whatever service or product is secondary, once you get over this you are on your way to understanding the rules of engagement of owning a business.
Mistake 2: You’re solely focused on surviving by building your business – and you’re not focused on your customers’ needs.
“There’s no luck in business. There’s only drive, determination, and more drive.”
―
Your one and only goal with your business should be to solve a meaningful problem for other people. This may be a slight contradiction to the above point, but is most importantly, do your homework, know your target market, be as niche as possible, it helps with your marketing success.
This is crucial. 48% of startups fail because they didn’t solve a market need.
They didn’t do the groundwork to genuinely understand their customers’ needs, wants and desires. How can you, as a business, meet a need that you don’t know about or understand?
That 48% failed because they didn’t put others first.
So how does it happen? Well, it looks a bit like this:
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- Founder gets an idea
- Founder builds a solution
- They try to sell it
- Nobody buys the solution (because it doesn’t meet their needs)
- The founder runs out of money
- The startup dies
There are no facts inside the building!
What does it mean, there are no facts inside the building? Simply put – the answers you’re looking for aren’t in your noggin. You need to get out of your own head, your own bubble – and actually talk to your users as much as you can, to get to the heart of their problem.
No business was built on nice-to-have features. The most important thing is to make your customer more successful by solving their biggest struggles, challenges, and frustrations.
Something nice-to-have won’t lead to a big business!
Another piece of advice? No plan survives its first contact with the market – so don’t spend months drawing them up!
Take five minutes to put your ideas on a business model canvas and go test them. The only way you’ll be able to grow your startup is by combining smart, agile business building with user research. By embracing feedback, you open yourself up to huge learnings and positive traction.
Want to build a successful startup?
You have to know what makes your solution valuable to others.
Mistake 3: No focus, no direction
“Lack of direction, not lack of time, is the problem. We all have twenty-four hour days.”
– Zig Ziglar
Right. Here’s a list I like to call the Four Horsemen of the Apocalypse. Why? Because they kill your business.
Are you ready? Here we go.
You need to stop:
- Networking
- Seriously… Who are you networking with, and for what? Is your target market at that nice virtual networking session? Probably not… You need to have a very clear idea of who you are looking for and why or you are just wasting your time…
- Recruiting a board of advisors.
- No! You don’t need a time-wasting board of people to tell you what to do. Get your solution ready, test it with customer feedback, and if you really need some accountability, then get yourself a real business coach, someone with real experience and credibility. Once you are established and making your millions then and only then look for your board.
- Doing partnerships without proof of extra revenue.
- What a great way to waste your time and money! Do you even know what you’re getting out of It?!
- Spending time on PR and social media.
- You get no points If you do this before knowing if you’ve got the right product for the right customer. What you’re doing instead is burning time and money on an activity that’s not going to have good ROI.
These four things will take the potential of your startup behind the shed and kill it.
Your business success relies heavily on you knowing what your customers really (really) want and then helping them find you with good branding and accessibility.
Basically, the only two things your startup needs to focus on right now:
- End users (your customers)
- Your product (the solution)
The only way to stay on track as a startup is to develop the product and talk to users. You just don’t have time to get caught up in other things.
Want to build a successful startup?
Stop spending all your time doing stuff that doesn’t create real value for you or your business. Get out there, talk to your customer, and create the product or solution they really want!
Mistake 3: Being a One-Person Team
“If you want to go fast, go alone. If you want to go far, go together.”
– African Proverb
There are three factors that combine to get a startup off the ground.
- Hiring good people
- Offering something customers actually want
- Spending as little money as possible…but if you need to, spend it on marketing when you have something to say!
My advice to each startup owner, entrepreneur or founder is this: find at least one person that comes from a different discipline and get them to join you.
Bring someone on board that can hold you accountable for your actions, goals, and plans. If you work with good people from the start, making something your customers actually want becomes so much easier.
Here at The Power Within, I have an incredible business partner. She also happens also to be my wife!
That extra bit of accountability from my business partner helps me focus more than anything. Because of that accountability, I live and breathe setting, planning for, pursuing, and achieving my goals every day.
My advice? Don’t be a one-person team.
Find someone to hold you accountable, or get yourself a good coach, but always make sure you do your homework.
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- Do they have credibility?
- What’s their experience? Is it relevant?
- What can they bring to the table?
- What have they achieved?
- Check they can do what they say they can do!
- Ask for recommendations, testimonials, or referrals from someone who has achieved results whilst working with them
- Do they have credibility?
Summary
89% of startups will fail. The entrepreneurs behind them will continue fighting huge wars for average results.
That doesn’t have to be you.
Follow these three tips, and you’ll be on the road to that 11% of startups who really do get results.
Let us know – what’s your takeaway from today?
James Fleming
The Power Within Training & Development
james@thepowerwithintraining.com
www.thepowerwithintraining.com
0330 133 2975
