You have probably heard the many horror stories of new business failures.
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You have probably heard the many horror stories of new business failures.
Here are seven myths about startup survival:
1. You must have a business plan: When I started Singer Executive Development, one of the first things friends said I needed to do was write a business plan. While this may be true if you are looking to raise funds, it's simply not necessary for a small self-funded company and can take time away from doing what matters. You should have a clear vision of what you are trying to do, begin with the end in mind, understand your customers, and have a strong plan of action.
2. You need to spend money to make money: When friends call me for advice on starting a new business, the first thing I tell them to consider is the required cash flow. You need to either have or know where you are going to get the cash to support your business for the first year, as well as your personal living expenses. The biggest reason new businesses fail is because they run out of money. Keep your costs as low as possible when starting your business. Spend money on the things you need, not the things you think a company should have.
3. You should make a profit in the first year: The odds are high you will not make a profit in the first year. When going from a salaried job to entrepreneurship, it's hard to give up the stability of a paycheck. But the first money you make will need to be reinvested back into the company.
4. All activity is good activity: You need to be very selective in how you spend your time and resources. Too many entrepreneurs burn the candles at both ends, yet only move sideways. Don't say yes to every request that comes your way and especially requests to work for free. When considering each opportunity, think about how it fits into your overall game plan and priorities.
5. It's all about the product: Your goal should be to help your customer, not focus on a product. You might have developed the best product since the wheel, but if customers are not excited by it, if they don't need it, your chances of success become much diluted.
6. Customers will find you: One of the most critical issues facing a startup is how to get the word out cost effectively. Customers won't just find you, especially at first. The methods that are most cost effective to successfully market your company will depend on the industry. You should always be networking. Some of the best opportunities find you because of the people you know and friends telling friends about you.
7. Success is yours if you want it: Wanting to be successful is not enough. It takes drive and tenacity to be successful with a startup, but it takes so much more. You have to be willing to put in the hours and become a jack of all trades, so to speak. It's not for everyone, but for those willing to take the risks, the rewards are many.
Launching a business is an uncertain, stress-inducing venture, but more small businesses actually succeed than fail in their first year. If you are ready, don't be afraid to take the plunge, but be conservative in your spending, aggressive in your marketing, and willing to adapt.
Andy Singer is the president of Singer Executive Development, a professional training and development company that helps optimize business performance of employees and executives.
