3 Secrets you should know!
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In this post I’ll share 3 misconceptions, you should be aware when running a start-up company.
These 3 dirty little secrets can become a huge asset for you. Knowing about them will help you to make the right decisions in your Business.
When I started my businesses I would have wanted to know them – but I didn’t!
Failing Rate of Start-Ups
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Based on research of the University of Tennessee
55 % of all start ups fail or give up during the first 5 years! 55%!!!
There is a bunch of obvious reasons why entrepreneurs fail, for example:
- Being into business for the wrong reasons
- Lack of market awareness
- Falling in love with the own product and therefore ignoring customer needs.
Three important things you should be aware of!
//www.youtube.com/watch?v=ynoxWD2t5u4
But from my own experience and from talking with lots of entrepreneurs there are 3 common misconceptions. Most entrepreneurs learn about them the hard way.
Sometimes they are the reasons why companies fail and entrepreneurs go out of business. Here they are:
1. The company you plan today will not be the company you end up!
You developed your business plan. You are pretty detailed about where you want to go with what kind of product and what you want to achieve with your business. That’s great, but be prepared that you will end up running a different business than the one you planned in the beginning.
Helmuth von Moltke
Why? Well, German military strategist Helmuth von Moltke once said:
“No battle plan survives contact with the enemy!”
When your plan meets the real world, the real world wins. That’s life! And you better always keep this wisdom in the back of your mind.
Does that mean planning is useless? Not at all! Thinking about the framework for your long-term objectives, having a compelling vision knowing about your core competencies are important assets to your business.
Planning your actions is crucial, because you get a better understanding what works, what is important and how things might develop.
Plans don’t lead to failure, but strictly relying on a plan leads to failure. The crucial point is: If circumstances are different to what you expected you have to change the plan. You have to adapt your goals and actions so they fit into reality!
That’s why I say:
The company you plan today will not be the company you end up – and that is totally OK!
2. Overnight success does not exist!
Nobody is an overnight success! When an entrepreneur or a company suddenly seem to appear out of the blue, it usually arrives out of 5-10 years worth of work and failures. Starting up a company and making it successful is hard and you will go through lots of Highs and Lows.
You have to adapt often and you probably have to fail many times before you truly understand how to do things successfully. Successful entrepreneurs fail often, but they get up and start again.
Entrepreneur Henry Ford
Photo: markaumark/ Resource: www.bigstock.com
Surely you know Henry Ford as a successful business man, well known for his innovative assembly line.
But he wasn’t an instant success. In fact, he failed 5 times in his early businesses. He was broke five times before he founded the successful Ford Motor Company.
Don’t get me wrong: That does not mean that you have to go thru bankruptcy but you will have to cope with lots of failures until you make it.
There is no overnight success in business! Never!
3. Everything takes longer than you think!
Starting and building your business takes time. You seldom get immediate rewards and most of your planned projects and forecasts will not come true – at least not on time. You better be prepared for delays and exceeded deadlines. You better work with internal time buffers and you should have sufficient financial buffers.
This is especially true for sales and profit forecasts in a start up environment. I’ve seen such a lot of forecast charts showing the typical Hockey Stick Curve.
Typical planning with Hockey Stick Curve!
This hockey stick curve illustrates exponential growth following a short, flat incubation period or following an even decreasing profit growth curve.
There are only very few companies which really have strong or even exponential growth in the beginning – and even if they show it – in most cases the growth will come later than predicted.
Why? Well, the initial phase of linear growth can be for years before the right product and the market fit is found. This point in time is mostly impossible to predict accurately.
So always be prepared and have buffers, because everything takes longer than you think!
What are your tips for successfully running a start-up company?
This post first appeared on More-Leadership Bernd Geropp | More Leadership, please read the originial post: here
