At Xeed, our mission is to equip SMEs to succeed. International statistics show that over 80% of SMEs fail within the first year of their business. We have been there; we started businesses that failed to achieve our desired objectives.
It is a fair assumption that no one goes into business without believing that they have a “sound idea”. We would normally speak to friends and family about our business ideas and those friends/family would affirm that the business is sound. This motivates us to put our resource (time, money and a whole lot more) into going ahead to develop the business.
Then we launch. At this point, we are simply getting to the starting blocks of a marathon race. The first few laps may by easy. Then, the legs start to get tired, the terrain gets rougher, things start to slow down and eventually we may give up.
Before continuing, I must congratulate anyone who got as far as the starting blocks. You deserve a medal. Because, against all odds, you have achieved what 99% of the population haven't. Many people have great ideas and do nothing with it, because they do not have the courage, conviction or drive to do something with their ideas. Therefore, congratulations for getting this far, even though this is only the beginning of a fairly long journey.
Running a marathon requires significant preparation: right diet, regular training, psychological readiness, etc. Similarly, anyone looking to start-up a business needs the right preparation. Here are 5 tips on how to prepare for the Business start-up journey:
- Have the right Motives
- Set clear Objectives
- Develop a Plan
- Avoid Paralysis-by -Analysis
- Learn from all Experiences
1. Have the right Motives
Ask yourself why you want to run your own business and be honest about the response. Then, be sure that starting a business will satisfy those motives. For instance, some people chose to run a business to allow them spend more time with their family. This is possible, but they should be aware that in the short-term, running a small business can actually take much more time than being an employee. Be ready for the sacrifices that may have to be made at the onset.
2. Set clear Objectives
Imagine setting out on a journey and not having a destination in mind. This individual may travel for miles and yet, get nowhere.
Setting objectives gives the business a focus which everyone involved in the business can be aligned to. It also ensures that all resource (people, money & time) are invested towards this common goal.
Objectives must be SMART: Specific, Measurable, Achievable, Realistic & Time-bound.
Examples of business objectives are:
· To grow revenues from the sales of PRODUCT_A to N1,000,000 per month within 12 months.
· To become the leading supplier of PRODUCT_B in Nigeria in the next 24 months
More will be covered on objective setting during the series on business planning.
3. Develop a business plan
“To fail to plan is to plan to fail” – this is a popular saying especially by project managers, which has proven to be true time and time again. If you are leaving your home heading to “destination A”, you need to plan how to get to there, especially if you’ve never being to “destination A” before. How would you get there, by car, taxi or walking? How long will it take you to get there? Do you have money for a taxi or for petrol? etc. Whether subconsciously or consciously we make plans even when doing supposedly simple each day activities.
Businesses also need a plan and unsurprisingly, it is called a business plan. I describe a business plan as an articulation of how to achieve a desired objective (destination A) starting from ones’ current position.
The main benefit of having a business plan is it help you to think about the details of the business, what resources do you need to achieve the objectives, what obstacles are you likely to face, who is the customer, what are the alternatives to your product, what is going to make customers buy your product instead of the one of alternatives... and many more questions. Any business – whether making cakes for childrens’ birthday parties or manufacturing high tech equipment needs to go through the process. In my experience, this is probably the number 1 reason why businesses do not achieve the objective they set out to do – the lack of insight.
We will cover business planning in more details in future sessions.
4. Avoid Paralysis-by-Analysis
I said that many business fail to achieve their stated objectives because of lack of planning. Unfortunately, many more businesses fail to start because of over-planning. They have a great idea, but kill it because they over-think everything; only seeing the risks, issues and major and minor flaws to the extent that the business idea is paralysed and never gets to the starting blocks. It is perfectly ok to assess the risks, but part of the objective of planning is to assess those risks - likelihood vs impact. Risks of low likelihood and low impact can be "parked" and energies focused on the few risks with high likelihood and/or high impact. However, some budding entrepreneurs focus a lot of energy on hundreds of low impact/low likelihood risks to the extend that they become overwhelming and paralysed from progressing the business.
No planning at all is very risky for any start-up. So is too much planning. It is therefore important to know when to pause planning and start doing.
5. Learn from all Experiences
Contrary to any dictionary definition, I would argue that not succeeding is NOT the same as failing. Not succeeding at a given objective should be considered as part of a learning process. For some, this could be a costly lesson because life savings have been invested into a project that does not go according to plan. Whatever the circumstance, if you are willing to learn from it, unachieved success is a lesson in something. The next time a similar project is approached, you will know what to look out for.
Carlos Barrabes a serial entrepreneur says "If you don’t fail it’s because you did not risk enough, and if you didn’t risk enough it’s because you didn’t put your whole self out there."
When things get tough, remember your original motive. Always keep this in mind as it will help you to keep going, persevering until you break through the pain threshold and start realising positive benefits in your business.
Over the next few weeks, we will cover some of these topics in details. Don’t miss any of the insights we will be sharing through this forum, sign-up for our newsletter today.
If you’ve recently started on this journey, we would also like to hear about your experiences so that together, we can build a strong platform for all budding entrepreneurs. Add a comment or your feedback below.
- GUIDE TO CHOOSING A BUSINESS NAME: Part 2 May 15, 2018
- GUIDE TO CHOOSING A BUSINESS NAME: Part 1 May 15, 2018
- MY START-UP DIARIES. PART 1: LAYING THE FOUNDATION March 18, 2018
- 5 WINNING STRATEGIES FOR GENERATING NEW BUSINESS IDEAS December 10, 2017
- PODCAST: KNOWING & COURTING YOUR STAKEHOLDERS October 26, 2017
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