Write Down these 10 “Musts” Before You Open Your Business Door
Studies show that at least 50% of all businesses go “belly up” within five years of their start-ups. Small retailers in strip malls open and close on a regular and consistent basis; that specialty burger joint lasted only a little more than a year; e-commerce websites come and go on a regular basis.
While there are probably dozens of reasons for these failures, many of the fatal errors are due to lack of critical pre-launch activities. With that in mind, here are 10 of the most important steps to remember and write down before you launch.
- Research Your Marketplace: You may really believe that you have a great product or service, and you are fully emotionally “attached” to your idea. Everyone else, including your target market, may not be so “attached.” Is there really a need for what you plan to offer? Who is your competition and how are they doing? How is your product or service going to be an improvement over theirs? You have to ask and answer these questions – it’s a certainty that any potential investor will be asking them too!
- Develop Your Business Plan: You will have to have it for your investors anyway, but it is important for you to get everything down on paper for yourself as well. You need to “see” your plan and to determine if there are important aspects you have overlooked or contingencies for which you have not planned. The clearer your plan, the more potential you have for getting investors, and the better your own “roadmap” can guide you.
- Consider a Partner: Most hugely successful entrepreneurs who began small had a partner (e.g., Jobs, Gates, and Zuckerberg). And there is good reason for this. The two of you can complement one another’s strengths and weaknesses and provide a balance; you can “pump each other up” when things go awry or look glum; and you can kick ideas around rather than spinning them around in your own head with only one perspective.
- Check Your Flexibility “Meter:” If your product or service is not the huge success that it is, are you willing to admit that and re-tool your business? Being flexible rather than rigid will allow you to accept when changes need to be made and to make them.
- Make Sure You Have Enough Startup Cash: A good “rule of thumb” is 6-months of living expenses, in addition to the money needs you have developed through your business plan. Your business budget should be realistic and should have some reserve built in. Investors need to see this budget; and once you find them, get that commitment in writing through an investor loan or stock agreement. One newer trend for entrepreneurs is to go “local” for their investors, using soft rather than hard money – this is a great idea if you can keep them from attempting to micro-manage.
- Line up Technology Pros: You may be a master in your business niche, but unless that niche is web design and content marketing, don’t be a “do-it-yourselfer.” You need the wickedest website out there, and it needs to be a grand “experience” for any visitor, on any device. Further, you need an SEO and Web marketing expert – someone who can blanket all of social media, spread your brand everywhere, develop your business blog, launch press releases, etc. Relationships with customers and potential customers today are built online, and you need to make use of every available strategy.
- Get an Attorney: Don’t “cheap Charley” this item – yes, there are all sorts of legal forms for start-ups, agreements, etc. all over the web. But your business may have aspects that are unique. An attorney who specializes in business law will be able to explain all of your incorporation options, draw up a partnership agreement, along with investor documents. She can advise you on the need for insurance and a host of other things. You are not a “legal eagle,” – your attorney is!
- Get a Mentor: Find a local successful entrepreneur, perhaps in a business niche that is related to yours, to provide advice and counsel. This individual will have already faced much of what you are about to, and will be an invaluable “sounding board.”
- Explore Business Networks: Of course, you will get on LinkedIn and other social media sites specific to your niche; however, local networking groups that meet face-to-face are critical as well. Join the Chamber of Commerce; join other business networking organizations that hold regular meetings. You’ll develop relationships even before you open your doors, and there is no way to tell where those relationships will lead you.
- Check Your Enthusiasm Level: How excited and motivated are you? What is your level of commitment to this whole entrepreneurial thing? Here is the test: If you are eating, drinking and sleeping you plan, then you are probably ready for this endeavor.