New Business Tips: How To Make It To Year 5
I was checking my updates on LinkedIn and noticed something that completely took me by surprise. Apparently I was so pre-occupied with all activities of my business, I didn’t realize Build.Automate, had turned 5. I am a very details-oriented person so it took me about 10 seconds to actually process — so much for being on top of things!
All jokes aside, this is an important milestone for me especially as most businesses don’t survive past their third year, according to the latest Census Bureau data.
In the services sector, 47.6% of new businesses survive the first 5 years. Given the tough economic times globally, I feel lucky, relieved and excited all at the same time for having made it this far. I think one of the secrets to my success has been my tenacity to adapt my business to market conditions quickly.
So, in celebration of five years of business, I’d like to share 5 new business insights on how to keep doors open past the excitement of the grand opening.
Overcome Fears of Failure and Inadequacy
Fear is the biggest reason businesses, I think, fail. Owners fear asking for more money when it is needed. They fear to communicate to employees and customers the true state of business conditions. Owners fear to take the next step; almost to the point where they are risk averse.
The decision to go into business is just one of many bold risks entrepreneurs should be ready to take. Continue to be bold, while understanding failure is only a stepping stone to facilitate learning and growth.
On a Post-It Note on my office wall, hangs a truth I coined into an inspirational message:
‘Never pass up the opportunity to succeed or fail. Either outcome produces personal and professional lessons for the next opportunity.’
Fear is a good thing, it tells us to be cautious but shouldn’t prohibit us from business growth.
See Change Coming and Embrace It
Failure to adapt to market change invites failure. Too often entrepreneurs become set in their ways despite what their profit & loss statement is really saying.
Accept the inevitable: Change will happen and your customers will define what your business will become. How often have new product lines been introduced as a result of a customer experimenting with a product and finding a new use for it?
Take WD-40, a lubricating spray that was originally designed to prevent corrosion on nuclear missiles in the 1950s. The many uses of WD-40 as a lubricating oil for almost everything have made it a household name in more than 160 countries.
Squeak When You Walk
Cutting back, lowering your growth expectations and doing things yourself are all cost-cutting measures have tremendous impact. You will have a tremendous impact on your bottom line by doing any one of these. Learning to make do with what you have and setting achievable goals will give you the ability to have more control on how you spend your resources.
‘Letting Go’ has many connotations. Early on in my business venture I had to let go of some employees. Although they were great people, market conditions kept me from keeping them on payroll. Each, on a case-by-case basis, was a very tough decision. The mistake I made was keeping them on longer than I should have, despite their outstanding contributions.
‘Letting Go’ also means letting go of pre-conceived notions about what you think your business is, what it can do and what you won’t do. Let go of the fact that you were once this great consultant on Wall Street or the fact you made major money and now you’re making a lot, lot less. Pride is a great hinderance to success. Take things in stride and run with them.
Don’t Try To Save Face
Communicate to your employees, associates and customers your true situation. Eventually, everyone will find out how well or poorly your business is doing.
Saving face is the fastest way to get egg on it. It takes true character to tell it like it is. I have seen entrepreneurs talk up their business when they were one step away from bankruptcy. Save the big fish stories for your buddies at the backyard cookout.
Of course there are many more tips and tricks to business success. But these 5 have certainly helped my business survive in these tough economic conditions. Adapt them, use them and don’t be afraid – and not only will you celebrate your businesses’ 5th anniversary, you’ll pave a solid road to 10.