Under pressure from the steeply rising inflation, many people are forced to come up with new ways to make ends meet. Adding a side hustle, especially starting a (side) business, could potentially meet that need.
However, if you are new to business ownership, chances of you succeeding are, statistically at least, not particularly good. According to recent data, “as of 2021, 20% [of start-ups] failed in the first year, 50% within five years, and 65% within 10 years.” Still, you can absolutely make it work! But the key to making your startup a success is to be prepared for your new venture in every way possible.
With that in mind, here are some tips to minimize your risk of failing:
1. Pick your Market and Niche wisely
A new business will challenge you in many different ways. This is why it is extremely important that you pick a business activity that you not only love with all your heart but that you are also good at! Do not get involved...
My entrepreneurial journey began with a passion for arts education and a desire to become a business owner. In 2007 my wife and I decided to acquire our first business, a fairly well-established music school with 6-figure annual revenues. I had zero business experience at the time but a lot of confidence that we would be successful as business owners and operators. Ultimately we did very well, but the first several years were humbling, to say the least, and took our business to the brink more than once.
There was just so much to learn. Still, through a lot of trial and error and with the help of business coaches, I was getting better and better at owning and operating this business. We built our business brick by brick, but our successes came with growing pains. With an increased number of clients, we needed more staff to support them. At the same time, quality of staff and their work performance became an issue, requiring us to train them to become better at their tasks. With...
Even in the best of times, owning or leading a company is extremely challenging. In addition to a myriad of business skills, it requires grit, perseverance, and an unshakably positive outlook to master internal business challenges as well as maneuvering the ups and downs of the marketplace. Since 2020, entrepreneurs have also had to deal with the impact of Covid both on their business and their own families. Trying to keep their companies afloat when money is running dry, and providing leadership and inspiration for employees battling illness and mourning the loss of family members have taken a serious toll on entrepreneurs. Dan Murray-Serter was among the first to identify this problem. In a 2020 Forbes article titled, “Why Entrepreneurs Need to talk about Their Mental Health,” he observed: “72% of entrepreneurs are directly or indirectly affected by mental health issues compared to just 48% of non entrepreneurs.”
We have taken a big hit, for sure, but...
I am so excited to be writing this blog post that I could barely wait to put down my thoughts on “paper"!
This is a story about what nature can teach us as business owners. But before I get into details, let me confess that I’m a health freak! There, I said it. Yes, I’m gluten-free, vegetarian, can’t eat certain foods due to allergies, and I try to eat vegan whenever I can. Even the sight of meat makes me feel nauseous. In my own home, I eat and drink organic almost exclusively. In other words, I’m one of those people party hosts dread and will eventually ask to bring their own food and beverages. Little do they know what got me to this point–a multi-year personal journey of recovery that led me from debilitating food sensitivities to now almost completely restored health.
But don’t worry. You don’t have to be a health geek like myself in order to appreciate what I’m going to tell you.
In our free time,...
I meet many business owners who are growth-minded and eager to scale up their companies. To understand where they are in their business development, I ask a basic but important question early in the conversation:
Who are your clients?
I am always a bit surprised when there’s a pause or hesitation in the answer. To be sure, some owners have done their research and know exactly who their clients are. But many don’t. I hear variations of, “Great question!” “It depends.” Or, my clients are a, b, c, d, e, f, g . . . (i.e., nearly everybody).
To help the owner focus, I then follow up with, “well, who is your ideal client?” But that tends to be even more challenging to capture.
We then move on to a discussion of the services the business offers. Sometimes, apparent confusion about the target market of the business goes hand in hand with an extensive list of service offerings and products offered for sale. You can clearly see...
Sooner or later, business owners wonder what their company may be worth in the marketplace–or, in other words, what an able buyer might be willing to pay for it. What most don’t know is that business value is not a fixed, immutable number but it can actually be increased by taking some deliberate actions on the business over time.
Before we look at that in more detail, let’s start with how business value is calculated.
Don’t worry! I won’t go into the nitty-gritty of business valuation here. That has become a whole science and industry of its own.
To start with, it may be useful here to compare selling a home with selling a business.
When you are selling your home, there are some universally accepted elements that determine its value, for example:
The other day I ran across an interesting article that talks about the reading habits of billionaires. Apparently, billionaires have time to read, and they actually read a lot! This suggests a direct correlation between a CEO’s commitment to regular reading and his or her success in business.
Indeed, the reading habits of some of the greatest business minds of our time are astounding! For example, Oprah Winfrey famously said, “Books were my pass to personal freedom. I learned to read at age three, and there discovered was a whole world to conquer that went beyond our farm in Mississippi.” In 1996, Oprah then turned her passion for reading into “Oprah’s Book Club,” which recommended one book per month to the viewers of The Oprah Winfrey Show.
In a 2019 interview, Bill Gates, the richest man in the world who reads about 50 books per year (about one a week), explained why reading is so powerful: “If you read enough, there’s a similarity...
In a recent blog article, I talked about how business owners often have difficulty envisioning a future without them at the helm of their companies. As entrepreneurs, our personal identities are so closely tied to what we do in and for our companies that the mere thought of transitioning out of business ownership at some point in the future can cause separation anxiety. Mix in fears–perhaps of perceived personal failure, our own mortality, or "the unknown"–and you can see why many business owners tend to avoid the topic altogether. But without careful preparation for an ownership transition, the results of a sale, if it happens at all, are bound to be disappointing.
Other than emotional issues, I believe that lack of factual knowledge and reliance on guesswork and false assumptions can also hold owners back from creating a strategic plan that could deliver the outcomes they want or need.
Lack of knowledge tends to fall into three large categories:
“This is my company. It will be mine forever.”
One of the hardest conversations to initiate with a business owner is about that point in the future when their company is no longer theirs. It’s a well-known fact that none of us will be on this earth forever. Therefore, the company we own today will at some point have to be either closed or transitioned to another party. Yet, many business owners become defensive at the mere mention of words such as “exit,” “sale,” or “ownership transfer,” abruptly closing down any further dialogue.
Having to part with our company is not a subject many of us enjoy contemplating. The thought of it seems to stir up fears–perhaps fears of our own mortality, failure, making irreversible mistakes, loss of personal identity post-sale, etc. That’s why talking with business owners about their (ideal) “end game” is not always as rational a conversation as it...
The other day I was asked, "can you change my company culture?" "Yes, I can help with that," I replied, thinking to myself, this is quite a loaded question! Nevertheless, as I will explain further below, there are some proven and concrete ways to address cultural issues in an organization.
Typically, “company culture” comes up when there are difficulties and misalignments in a business. Among other signs of trouble, these may include any or all of the following symptoms:
If these problems occur on an ongoing basis, then they are becoming cultural—an integral part of how the company performs and does business.
Worst of all—if you are an ambitious and growth-oriented business leader—these types of misalignment will not allow you to scale your company to its...