According to the Bureau of Labour Statistics, 50% of all new businesses fail in the first five years. For startups specifically, this statistic leaps to an astronomical 90% failure rate. The reason for this, says business consultant Federico Shephard, is because startups are much more volatile. Most of them are still firmly in the ideation stage, rather than the growth phase. And if your company isn’t growing, it’s dying.
Many entrepreneurs skip right over the crucial step of business planning, says Federico Shephard. When you have a great idea and you’re excited about starting your business, it can be easy to breeze right past the details in favor of the big picture. But it’s those details that build a solid foundation for your business.
Laying out your business goals, writing your mission statement, creating your logo, prepping marketing materials, assessing your finances and applying for loans, stocking inventory, completing customer research, choosing a legal entity for your business, obtaining any permits or licenses you need… Any one of these small steps could make or break your business. It’s vital that you take the time to carefully plan.
Federico Shephard says he meets a lot of entrepreneurs who are driven by a desire to work for themselves. While this is a perfectly acceptable goal, you have to make sure that working for yourself doesn’t turn into working alone. The phrase “No man is an island,” is a cliche for a reason.
As a business owner–even if you’re a sole proprietorship–networking is an important tool that can help you take your business to the next level. Join leads groups, seek advice from leaders in your industry, ask someone you trust to act as your mentor, join or start a support group of other entrepreneurs who can help and support you!
Don’t be afraid to ask for help when you need it. Generally speaking, people are more then willing to lend a hand or offer advice. Building a community around you can keep you going, even when it feels like you’re drowning.
When businesses are struggling financially, marketing is often the first thing on the chopping block. While this is sometimes unavoidable, make sure that you aren’t underestimating the importance of marketing in general, says Federico Shephard. You may have the product of the decade, but if no one knows about it, you’re not going to be able to turn a profit.
If you have to cut back on paid spending, make sure you step up your content marketing, social presence, and SEO efforts to make up for it. All of these things take time and effort, but they are free if you do them yourself.