Four out of five new businesses fail. This is a frightening statistic.
However, there are many simple reasons why this can happen and as long as you approach your business with a level head, take calculated risks and know your market and industry, you have significantly less to worry about.
Below are some reasons why your new business wont end up as a statistic.
Everyone else’s capabilities don’t reflect yours
There are a lot of pessimistic people out there who don’t believe in their success. Even among the optimistic ones, they probably have only moderately ambitious goals.
You on the other hand, have high aiming goals. You aren’t aiming just to succeed or even being profitable, your goal is to grow as large as you possibly can and/or have an operation that runs without you. Since you aim to accomplish so much more than the basics, failing shouldn’t even be on your radar. Just remember to be patient and persistent.
Your product is profitable
You conducted your market research and your competitive analysis, so you not only know that your product is profitable, but you also have a rough idea as to what marketing and advertising mediums work best for your target market.
Even if your marketing doesn’t work right away, you know the problem doesn’t lie with the product you are selling, so all you have to do is continually tweak your promotions until something works. Again, it’s only a matter of being persistent and patient.
You are delegating when necessary
It is extremely important to delegate and outsource when necessary. There are two instances where this is especially important: a) you are a new business and your marketing requires specialists in order to advertise properly (ie: web design, SEO), or b) you are starting to attract a lot of business and you need to ensure you have the time to dedicate to leading your business as opposed to working in it.
As long as you delegate and outsource during these critical periods, you will be in the optimal position as leader and visionary of your business and you will ensure that you are steering your business in the right direction.
A word about debt and other fixed, recurring costs
You know that there is demand for your product, however until revenue is guaranteed you want to avoid taking on too much debt. If you are still in the marketing test phase where you are still figuring out the optimal marketing mix for your product, revenue is still very unreliable. It could be very dangerous if you take on debt that you don’t know that you can pay back. The same is true for other fixed recurring costs such as rent for office space.
Being unable to afford these commitments every month causes many promising businesses to fail. Please don’t let yourself be one of them. I can’t tell you not to take on debt (if you can even get a loan in this environment), but I can only ask you to use discretion when borrowing money that you aren’t sure you can pay back.