Fifty percent of businesses fail: Three steps you can take to beat the odds
So you have an amazing idea, and you can’t wait to start your own business to share it with the world. It’s exciting—and daunting. We know you want to hit that play button as soon as possible, but, before you do, take a breath: there’s a lot to think about.
In a world where more than 50 percent of business startups fail within the first four years, how will you make yours succeed? And, to be brutally honest, have you taken a hard look at that amazing idea to make sure it can truly be profitable?
All of this isn’t to say you won’t end up building something incredible—but business is hard, and whatever you want to happen doesn’t come without planning. A lot of planning. And revising that plan. And, sometimes, scrapping it altogether and figuring out how to go from there.
Jason Pliml, a longtime business consultant and the owner of LongerDays, a Muskegon-based virtual assistance company that works with businesses across the country, knows all of this well. He’s worked with companies that have succeeded and failed—and, sometimes, gotten stuck in the middle. As he’s navigated our country’s business trenches, what has he learned when it comes to finding success?
Know your customer (intimately)
A lot of it comes down to some pretty basic questions: will you be selling something that makes customers’ lives meaningfully better? And do you really know who your customers are?
“The biggest competition everyone always forgets is the status quo,” Pliml said. “How are your potential customers currently solving the problem you want to address? If they’re solving it using a Google document, how much better are you than a Google document? If you’re not better enough, then the status quo kicked your butt.”
While tackling these questions, you’re also going to need to develop a deep understanding of who exactly your customers will be.
“I’ve seen so many businesses that didn’t narrowly define who their customer is; they generically think it’s every male in America or anyone who owns a house. It’s way too broad,” Pliml said. “You have to focus on who your customer is—and who is not your customer. If you can’t say, ‘This is not my customer,’ you’re probably going to fail.”
Question yourself and embrace rejection
Once you’ve tackled what problem you’re solving and who’s going to be buying it, you’re going to have to start asking some hard questions—and be able handle the feedback.
“I see this all the time when people are trying to do validation of a new service: they ask questions in a way that begs for a positive answer,” Pliml said. “They ask, ‘Do you like this; would you buy this?’ They almost never ask that critical question: ‘Will you pay me $20 for this right now?’ Because that question forces the truth to come out, and that’s especially true when dealing with ‘Midwest nice.’”
In other words: People like you. And they like that you like what you’re trying to do. But it has to be more than that. You’re going to have to move past pleasantries and figure out if folks are really going to purchase your product or service. Pliml himself had to figure this out the hard way.
“There’s a lot of business ideas, but many of them are bad,” Pliml siad. “I had one of those ideas. I built software to run auctions for nonprofits. After building the software, we quickly found out every nonprofit would say, ‘We can’t afford it, but we’ll tell the next person about it.’ People would absolutely use it, but they wouldn’t pay for it. And if they won’t pay you for it, you can’t call them customers.”
Here’s the thing: it’s hard learning that your business idea isn’t ready for launch. But, it’s a lot better to figure that out now instead of after you’ve sunk thousands upon thousands of dollars into a company that’s not going to work.
“Rejection sucks, but if you’re not willing to say, ‘Ugh, that hurt,’ and get up and keep going, then business probably isn’t the right choice for you; you’re not ready for it,” Pliml said. “It’s scary, and it’s going to hurt. You’re putting your baby out there and being told it’s ugly. That’s hard.”
Through all of this, it’s important to remember: you’re not alone. There are numerous organizations out there that offer free business mentoring and support, including SCORE and Michigan’s Small Business Development Center. And once you’ve gotten your business up and running, don’t hesitate to delegate—to businesses like LongerDays, or hire your own employees. Don’t try to do everything on your own; you won’t be able to survive if you can’t delegate, Pliml emphasized.
New business owners feel like they should have the answers. Yet the most successful executives will be the first to tell you that they regularly reach outside of their company for help.
“I always remind people that what somebody else who is not in your business brings is perspective,” Pliml said, explaining why it’s necessary to be able to ask for help. “On any given day, you’re dealing with minutiae, with specific things, so it’s very hard to step up and say, ‘OK, where are we headed?’ Having someone outside your company who understands business and can ask you big-picture questions is imperative.”
This sponsored column comes from LongerDays, a virtual assistance company located at 360 W. Western Ave. in downtown Muskegon. You can connect with LongerDays on their website, Facebook, Twitter, LinkedIn, and probably at Pigeon Hill—the brewery even named one of their beers after the company. Thanks for the support, LongerDays—we’re happy you’re in Muskegon!