What’s the plan, Stan?
Just like someone doesn’t go into a marriage thinking of divorce; no one starts a business thinking it is going to fail. When the time is right to start a new business do your homework!! While planning for success, make sure to take everything into account that could impact your business both positively and negatively.
- Do you have a marketing strategy?
- Does your brick and mortar location take advantage of traffic patterns?
- Do you have enough capital to sustain the business in its start up phase? Will weather affect your business success?
The last question sounds silly until you realize that shipping and delivery can be delayed beyond your control. The extreme weather conditions the last several years have impacted shipping deadlines and caused hardships for business owners, customers and delivery companies. Other factors that influence profit margins are fuel and shipping costs. In 2008 and 2009 these factors severely impacted signed bids and contracts that contractors either honored (and then suffered losses) or renegotiated (which caused trust issues).
Make sure you have trusted advisors who can counsel you in business areas outside your areas of expertise. Talk candidly to a trusted accountant and lawyer. Don’t just listen to their advice; hear and understand it! Structure your business so that you minimize your potential for personal loss.
- Patents
- Finance
- Insurance
- Employee Management
These are just some of the areas that are outside most business owner’s comfort zones. Insure your idea or product stays your intellectual property! Make sure your finances are in order in the event your business model does not meet your expectations! You must have an adequate cushion to suffer economic down times or unexpected business challenges. Invest in insurance! You heard that right, invest in insurance!! Maintaining health and business insurance is critical!! What happens if you are not physically able to run your business? Be aware your decisions not only impact your company but your family.
Always vet your core product with today, tomorrow and the unknown in mind. The worst thing you could do is go into business, a business meeting or the public eye without a solid game plan. Having the right idea or product without doing your research, having strong financial backing or contingency plans, is like going into a duel without a weapon. There is only so much talking you can do before you have to take action.
Don’t be caught unprepared; one-third of all businesses fail in the first year. By the 2-year mark that number is 44%. 56% of all new businesses are not around in 5 years. Even those harsh numbers do not sway entrepreneurs when they get the bit in their mouth and want to run with their business idea. Not having a sound game plan will hit you where it is really going to hurt; financially, intellectually, emotionally and sometimes physically.
Remember: plan for the best but prepare for the worst. When thinking about starting your new business; say to yourself: what is the worst that can happen? From there; plan accordingly and reach for the stars!!!
