I become a little dismayed when I come across research indicating that one in three new small businesses in Australia fail within their first two years. To me, this suggests that we have potential entrepreneurs who possess the courage, drive and determination to succeed - but they are perhaps neglecting to undertake the essential research and preparation that is necessary to ensure a solid foundation for achieving business viability
In other posts and pages, we've explored some of the early market research that must occur in testing your product or service with your target market. And we've examined the competitor analysis necessary to identify how you will differentiate yourself from your competition.
Many start-up new businesses have a tendency to initially over-estimate demand for their product or service, and under-estimate their competition. And many fail to anticipate the cash reserves they will require, to survive the start-up phase.
Look within ...
During the preparation stage before launching into a small business for the first time, just as important as a competitor analysis is that you have undertaken a self-assessment of your own business capabilities.
There is a broad mix of skills that you will need to succeed in small business, and if you are able to recognise you are lacking in a core business management capability, then you may well need to invest in some training for yourself.
Business Management Training Courses if you are based in Melbourne, Australia - it lists some of the TAFE and Uni courses that can lead to a business management qualification, as well as some shorter courses that can offer quick down-and-dirty techniques you can immediately start applying
So what are some of the business skills you need .....
- Sales & Marketing skills -:Identifying opportunity gaps in the marketplace. Listening to your customers - designing and improving your product or service to meet their needs. Building relationships; persuasive communication skills. Ability to network and promote what you have to offer
- Planning & Organisational skills - Forward planning, goal setting, prioritising, scheduling and time management skills. Designing procedures and systems that enable efficient flow of work through the business
- Financial management skills - budgeting, financial projections, cash handling, accurate book-keeping
- People Management skills - Recruiting the right people, training, leading and motivating your staff, so you get the best out of them in your business. Learning to delegate effectively - so you share the load and learn to let go of the need to control all the details
There are many people who quit small business, having become discouraged and disheartened because they didn't achieve the quick success they'd dreamed of. There is no question that one of the personal attributes you will need is mental toughness to provide you with the stamina to get through the periods of frustration and uncertainty when things don't initially go quite as planned. You need to be capable of stepping back when things go wrong, taking a deep breath - and then learning from your mistakes.
But some people can't seem to do this - they keep on doing the same thing - not taking the time to reflect and learn - and then wonder why their business is failing. Unfortunately, there are instances where gaining more experience by itself is simply not a good enough teacher.
There are entrepreneurs who get through the challenges of the "start-up" stage with their small business - and who find their formula for success. They lead rewarding and prosperous lives ...... I have found that these people typically engage in regular reviews of their business, to identify what's working and what can be improved. They also engage in regular self-review of themselves, honestly evaluating their business skills and personal capabilities to see what can be improved.
If you are interested in self-improvement, have a look at Personal Development which offers some great tips and advice on self-motivation, focus and inspiration
For the person entering small business for the first time, plan to gain some small business skills training. Also, try and find yourself an experienced business mentor. This type of extra preparation can make the difference between your business adventure being a satisfying experience of achievement, versus one of bitter disappointment