Every year there are hundreds of failed business in Australia. This is for a wide variety of reasons but the vast majority of these are young businesses or start-ups.
- The commitment and energy it takes to create a successful business.
- The difficulty when taking a random approach to starting a business.
The input required
Countless people stumble across an opportunity and entertain the idea that it may be the basis for a business. Some take the idea further, but there is something rare about the individuals who manage to get a business operational.
The rarity is the ability to clarify their thinking and then become so motivated by it that they devote whatever is required from them to making the thought a reality.
Part of the issue today is that life is so frantic for most people that they find it difficult to schedule in another task. Consider a new commitment and the first thought of most people would be “Where would I find the time?”
The simple truth is a matter of choice, and often it is an unconscious one. We all have the same number of minutes in a day but some people make a different set of choices about how they spend them.
There are a couple of interesting tools here that may help the new entrepreneur.
Timeblocking is a method to evaluate how you will spend every available moment. It is simply a one page sheet like a diary (usually one week at a time) and the whole waking time is blocked and allocated. This forces a choice at the time the plan is created.
Another is the mindset around the result. Elite athletes devote hours to becoming the best. Often this means very early starts and forgone social lives and forcing other aspects of life to fit in around their training. This is the commitment they make to get a result. The result is often a single outcome that is easy to envisage and work towards. It could be winning an event at a state or national championship.
Business is not so simple. There usually is no single win or lose event. Success is long-term and usually distant in the future.
This makes it much harder because people see the business as part of life and it has to work in with other parts of an existing life. It takes a huge amount of energy and focus to get a business going and most of the time there just isn’t enough of either spent to get a business operational and failure prevails.
It brings us however to the second of our key topics.
The random approach.
Most people who start a new business haven’t done so before.
They may be full of excitement and enthusiasm but starting a business is a challenging endeavour and the battle is often to see which side of the equation rules the other. The level of energy and commitment vs the requirements to build a business to a profitable or sustainable level. If the energy runs out first the business will not celebrate many birthdays.
The uninitiated will take a random approach to starting their business. Both in what they are doing and also the sequence in which they initiate and complete the steps. They are learning along the way, mostly by trial and error.
This approach devours time, cash and mind-space. It erodes the excitement because small setbacks turn into searches for justification as to why the business challenge was to great and these form the reasons (excuses) as to why the business did not endure. You have hear so many times before statements like “the timing just wasn’t right.” or “ the market was at its toughest ever”.
There is a way to shift that balance in favour of the entrepreneur.
It is to invest time at the beginning of the process to get the planning correct. People don’t just start with one piece of timber and commence to build a house. House plans in the modern world are sophisticated, created by experts, and more importantly are supported by a management sequence that drives each step in the most efficient sequence, including wherever possible the overlapping of tasks that can happen concurrently in order to get the outcome as quickly as possible.
This is a science now in the building industry and so it is with business. Unfortunately this concept does not make itself known to many entrepreneurs.
To work to a plan enhances the chance of success. To create the plan is a science and an art. No two circumstances are the same. Planning needs to provide a framework that can easily be adapted to any type of start-up business but at the same time it needs to cover all of the crucial steps required to build a business that will endure.
Analysis of what is required reveals that two of the key attributes of a planning process are:
- all the bases must be covered
- The business must be profitable
The second concept is easily understood. Any business that does not sell something at more than it costs to create and deliver that thing is destined for failure. A crucial part of this is the notion that the business must “Sell” (for income), whatever it produces. There MUST be a sale. Usually to create this sale there is required some type of marketing to promote the availability of the product or service before the consumer even knows about it in order to choose if they will become buyers.
The first concept noted above is less well defined.
A business is a myriad of intricate parts. From legal compliance to building the product or service delivery system. There are many, many things to be done. Most operational businesses are a combination of between 400 and 650 individual systems required for operation. These are things like; taking orders or making sales, how marketing components work, tracking the money and managing the bank account. Even determining what technology and computers will be required. Plus so much more.
Each of these elements needs to be considered, figured out and put into practice so it works collectively with all the other parts of the business.
The alternate to a random approach is to seek guidance in putting together a planned approach. Tapping in to the experience and background of experts who have seen the best ways to pull all these components together. Even better if there is access to template examples of many of the required systems so the entrepreneur only has to adjust them instead of invent them from scratch.
The journey to entrepreneurship is an exciting one without doubt. It’s rewarding if successful and can be heartbreaking if not. After reading this article it is hoped that you are better armed to face the journey and are prompted to seek the direction before spending all your energy and motivation on a difficult path rather than the most efficient one.