With more than 2.5 million actively trading businesses in Australia – 472,731 businesses were started from 2021-22 in Australia and 305,085 exited.
Many businesses fail in their first few years. Among the biggest challenges facing business owners at the moment, is finding and retaining top talent as the skilled worker shortage continues across many industries. Other significant challenges since the pandemic include continuing supply chain disruptions and increased operating costs.
Beyond situational factors, there are some common reasons why some businesses are more likely to fail than others. Inadequate research or failing to identify a unique business offering with demand, poor planning, lack of funding, poor financial management, scaling too quickly, hiring the right staff, insufficient marketing, failure to adapt and an overall lack of support among the most common.
In fact, research from CBInsights found that 42% of startups failed as there was no market need for their products or services. This was followed by 29% which failed due to cashflow, followed by the wrong team, being outcompeted, pricing issues, poor product, no business model, poor marketing and lastly, ignoring customers.
So, as a founder whether this is your first rodeo or tenth, what are the systems, tools and supports that can prevent you making these mistakes and falling victim to the 60% failure rate?
- Identify a genuine gap in the market
This doesn’t need to be a new product or service entirely, but something that can be clearly improved upon, or something there is growing demand for. An idea can sound great and even solve a problem, but if people aren’t willing to pay for it, you don’t have a business. Do your market research and do it well!
- Find fellow founders
If we’re to believe the oft-quoted motivational speaker Jim Rohn that ‘we are the average of the five people we spend the most time with,’ it would be pertinent to surround yourself with other successful business founders. It makes sense in business to quickly find yourself a network or support community that have a track record of success and can share their learnings with you to keep you on the right track. Entrepreneurs’ Organisation has been this for me for the last 7 years, with a regular forum keeping me connected to peers in a trustworthy environment, as well as providing regular networking and educational opportunities. Find your community quickly and stay accountable.
- Mindset Matters
If you believe you will succeed, your probability of success multiplies significantly. When you believe you will succeed, you’ll take the necessary steps and attract the right people to make it happen. Furthermore, if you believe you can improve upon your abilities (growth mindset) rather than just being able to succeed, you’re more likely to bounce back from any setbacks, or start over after failures, learning from mistakes.
- Consume as many business books as you can
One of the cheapest learning tools is still books! Whether you join a library or get a kindle, business books should be your best friend. Some of my top recommendations include: Eat that frog, the lean startup, the four-hour work week, 7 habits of highly effective people, the personal MBA & Getting Things Done: The Art of Stress-Free Productivity, to name a few.
- Find a mentor
Unlike a coach focused on pushing you to achieve your goals, a mentor should be a trusted advisor in your industry who can offer feedback and guidance when needed. Set up a regular meeting with them and be thoughtful in the problems or challenges you bring to them.
- Network outside of your comfort zones
Connections can be found everywhere. Pushing your comfort zones, trying new business groups, new hobbies and exploring new places can expose you to new opportunities. Be open and willing to make the connections.
- Trust your instincts
Your gut is one of your best business tools, as many people often learn the hard way. When you’re starting out it is likely that many well-intentioned people in your life won’t understand or see your vision. Some business partnerships or connections won’t be right along the way. Tune into and trust your gut in your decision making, rather than being swayed onto a path or decision you feel isn’t right.
- Offer as much help as you ask for
Running a business isn’t an easy task. Build relationships and maintain them, supporting others as much as you can – you never know when you may need them to return the favour.
While all business owners aspire to great success (whatever success means to them), all have at some point experienced failures, whether failure of a business or failures within a business. Overnight successes are incredibly rare; More common among successful founders is learning that they’ve had multiple prior businesses they’ve learnt from. Failure is simply part of business and we need to embrace making mistakes and growing from them.
Surround yourself with the best, learn from books, mentors and peers, find business groups with like-minded founders and trust your instincts and ability to learn and grow.
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