Building Sustainable Businesses
posted on Oct 2, 2018 | 84 likes
Find out why only 25% of new businesses survive through the first five years after establishment and how to build businesses that live centuries after.
Being an entrepreneur is not working on your own terms like so many people believe it to be, in fact it requires extra hard work and sleepless night. As indicated in a research by Small Business Administration, only 50% of new businesses survive through the first five years after establishment and only one-third of the 50% are able to survive for 10 years. This study shows that about 65% of new businesses do not survive through the first 10 years. It is not surprising however that a lot of businesses in Nigeria start so quickly, like a sugar rush and fade out almost as soon as they started.
Many entrepreneurs believe starting a business is about having an idea to solve a problem, getting the right hands and skills to execute it and then launching it into the market. Actually it is just that on the surface, but in reality it is more than that.
Most startup businesses fail because of several reasons such as but not limited to:
Money-Making Mind Set
Before now, the sole aim of starting any business is to make money. While this is partly true, some other vital part was usually missing. However, some entrepreneurs still rely solely on this as the only reason why they want to start a business. With this mindset, it is only a matter of time before such business fizzles out. Entrepreneurs fail to realize that businesses have changed from being business centric to customer centric. Which means, value creation should be the first aim in business, the need to meet a need is the first essence of business. A valuable product or service is like a magnet, when it is able to meet the needs of the customer, it automatically pulls in the monetary value. With the money mindset, entrepreneurs will only see the need to make money above the need to satisfy the customers, forgetting that, if they do not meet the needs of the customer, they not only give room for their competitor to take away their customers, they also miss out on their sole aim, which is to make money.
Lack of Proper Planning:
A lot of young entrepreneurs get so excited about their unique idea, service or product that they can’t wait to be the first to start the business. They are in such a hurry to let their unique idea ‘hit’ the market that they forget to put a lot of work into strategic planning as to how it will be structured. They fail to carry out in-depth research into their target audience to be sure they are the perfect fit for the product. They also sometimes fail to take into consideration the need for right timing, as it will be very useless to sell an umbrella during harmattan season. These among many other things are the basic things some entrepreneurs fail to put into proper consideration before setting out to start a business. Thus they begin to experience some pot holes they didn’t foresee.
Lack of Foresight
Foresight is the ability to detect or predict future unforeseen events that may occur. It’s a skill that a lot of entrepreneurs lack. When an entrepreneur lacks the ability to predict unforeseen events that may occur in the business, not only will it be difficult to prevent it, such entrepreneur will also not be ready to face the situation whether good of bad.
Starting a new business can be very tedious for young entrepreneurs, as it will require a lot hard work, discipline and endless commitment. Here are some tips to get new entrepreneurs started with their new business venture:
· Love what you do
According to Steve Jobs, ‘the only way to do great work is to love what you do’. The first step to starting a long lasting business is to love it. You need to love the idea you have, love the value you have created. The passion for the work is what keeps you going during the rough days, it builds your tenacity to endure the rainy days of the business. With this attitude, you can only get better each day, because you will always find new ways to improve your value and better opportunities to always be the best. The love for the business creates an enthusiasm to work harder in order to achieve great results at all times.
· Research. Information. Data
Overtime, Research, Information and Data has become the back bone of businesses. You need adequate Information about your business. As an entrepreneur you need accurate information and data to ensure that your product is the best fit for the consumer, you need to know how they will like the product or service, and you need to know if it is the right time to introduce your product to them. Adequate information enables you plan and prepare for the task ahead. It is usually the first step to proper planning.
· Develop Relationship Skills
People are everything. As an entrepreneur you need people to think the business plans through, you need people to executive the plans and you need people to buy your product or patronize your service. It is not news that no one can build a successful business alone. Therefore building and maintaining good relationships with your staff and other businesses is relevant to the success of your business.
Building a good work relationship means you have to;
o Respect people: The way you treat the people that work with you, determines how they treat your business. Respect those that work with you by letting them know you value their input and by keeping the communication gateways open. This means you should be approachable.
o Embrace Diversity: Avoid boxing people, by enforcing them to think and act in a certain way. Accept and encourage other people’s ideas. It enables creativity and growth.
o Be Self-Conscious: Always take responsibility for your words and your actions, be careful not to let your personal emotions affect the people around you.
You also need to build relationships with other businesses because you might need to get an instant loan someday and you need to have built a credible profile that makes you trustworthy. You might need to partner with people that will love to invest in your business also. All these and much more are reasons why good relationships should be built and maintained.
· Develop Work Structures Ahead.
As a new entrepreneur you might ignore the need to set up firm systems and processes, because you feel it is too early or the business is just starting. You might want to wait till you have the complete staff before creating a structure, but you should know that it is better to go ahead and state the roles, functions and regulations that will govern everyone you intend to hire In future. This is not just professional, but it gives people the assurance that your business is credible and can be trusted.
Putting structures in places allows for fast growth, as everyone is aware of their specific roles and functions within the organization.
Beyond the above tips, entrepreneurs need to be disciplined enough to follow through with their state plans. With proper planning and discipline, entrepreneurs can achieve about anything.