Thousands of businesses are started every month. Only a handful of those are still alive after the first year, and even fewer of those make it to their fifth anniversary.
What separates the successes from the failures is sometimes a matter of luck or external factors outside the control of the owner, but more frequently the failure stems from a lack of preparation and knowledge.
The ideas in this article are not the standard “tips and tricks” you will find if you Google “how to succeed in business”. These are more fundamental and at the same time more critical to success than such words of wisdom as “be flexible” and “learn from your mistakes”.
Arming yourself with this information and making sure that you are focusing on the right issues can provide the weight that you need to tip your business from potential failure to probable success.
Your own personality and values
First of all, if you’re thinking about going into business for yourself, hopefully you’re doing it for the right reasons. Sure, you don’t want to be reporting to someone else all the time. And you don’t want to make someone else rich while you toil away for pennies.
But unless you’re starting a business doing something that you love, and that you can make your focus 24/7 for the next couple of years, chances are that you are headed for failure. If you cannot commit 100% to your new business, giving up your sleep, your social life and the financial stability that (usually) comes with a pay cheque, then you should not be starting your own business.
Likewise, the business needs to be aligned with your personal core values. If you find porn offensive, then you should definitely not be starting up a series of adult websites, no matter how much money they reportedly make. You need to make your business something that you can believe passionately in, so that you can convey that passion to your customers.
Where does the buck stop?
Ultimately, you as the business owner are the final backstop in case something goes horribly wrong. As countless politicians have demonstrated recently, you really don’t gain your customers’ respect when you blame a mistake on your hired help. It does not improve your reputation to claim that you were ignorant.
You must be the first and last person responsible – after all, it’s YOUR business. Yes, you train your subordinates well and, yes, you can’t possibly oversee every aspect of the business every minute of the day. But when the excrement is approaching the whirring instrument that stirs air currents, you had better be the one who says, “It’s my fault and I am terribly sorry.”
The next thing you say after that is, “This is what I am going to do to make things right.” And then you do it. Once you do that, people will definitely respect you and will give you and your company a second chance.
Build a strong team
A successful businessperson knows that he cannot do everything himself. Even if he could, it would likely not be the most efficient use of his time. So he should concentrate on doing the tasks that he does best, and find other great people to do the tasks that he cannot or does not want to do. Recruiting outstanding employees is critical to success.
But successful leaders don’t just have great subordinates. They also generally build a group of their peers whom they can approach for consultation and advice. No one works in a vacuum; if you have a roster of experts available, both in your field and others, then you will be able to address problems when they arise with your business.
Think of a football team. The team has a head coach and an assistant coach, but the players also work with a goal kicking coach, a tackling coach, a midfield coach, and a conditioning coach. Each specialises in a particular aspect of the game, and is called in when a player requires help for a particular situation.
If you build a team of coaches covering most aspects of the business world, you’ll be well prepared in the event that just about anything happens. And if you’re truly passionate and committed to your business, you have minimised many of the problems that plague a new business and tipped the scales in your favour.
Know your numbers
Unfortunately you can have all the above things addressed, but if you don’t know and understand your numbers you are destined for failure. You must know your numbers and be forward looking. It’s OK if you hire someone to do your day-to-day bookkeeping, and even to prepare your monthly or yearly reports. But if you don’t know precisely how and where your money is being spent, and how much is coming in, you are setting yourself up for big trouble.
Finn Kelly is the CEO and co-founder of award-winning Gen Y financial advisory firm, Wealth Enhancers, along with the parent company, premier private wealth management firm, WE Private.