20% of small businesses fail in their first year, with the number reaching about 50% by year five, according to the Bureau of Labor Statistics. And the last couple of years has made those numbers even starker. But good news: if you can hang in there past that point, the numbers start to work in your favor. Here’s how to make your own luck through those first few volatile years so that you can beat the odds.
Do What You Love…and Know
Not all hobbies make great businesses. But if you’re going into business, it pays to move into a niche that you’re passionate about, not just cynically chase the big bucks. Not only will you be more likely to follow through even when times are tough, but you’ll arrive with a deep understanding of the market, your positioning, your competitors, and what kind of challenges and opportunities you’re facing. There’s a reason that most of those tech startups aiming to disrupt established industries fail: they don’t know what they don’t know.
Plus, in this world of thought leadership, it’s that much easier to become a name-brand pro in your field.
Have a Plan…and Money
You’ve got a killer idea, and you’re desperate to jump in to leverage that sweet first-mover advantage. But hold up. Take the time to work through a solid business plan, spending time defining your concept, your goals, your structure, your startup costs, your products and services, your marketing plan, and your financial plans and forecasts. Extrapolate these out beyond your first year, and have a plan for dealing with possible challenges, shifts, or pivots. Be conservative in your success estimates to force yourself to plan – not just hope.
While you’re locking in your business plan, start sourcing funding, and ensure you have enough runway to see you through those first rocky few years. If you’re taking out loans, you’ll need to show you have enough cash flow to service your debt – and that you have multiple solutions for mitigating the risk of default.
Create a Powerful Brand…and Identity
Image isn’t quite everything, but it’s close. Your brand identity is a set of rules, guidelines, and verbal and visual cues that align with your values, mission, and goals. It helps you figure out what’s “you” and what isn’t, positions you in the market, and makes it easier to define and communicate your company culture. Taking the time to outline what you look and sound like and what people can expect from you will help you create a consistent, cohesive approach for both your internal and external stakeholders. Get it right, make it unique, and you can be an Apple in a world of Microsoft.
Build a Great Team…and Keep Them
Great businesses come down to great people. Be exacting about building a standout team that balances business and creative minds, give them clearly defined roles and goals, and empower them to make decisions and be a part of the company’s vision. Giving great staff freedom and autonomy together with strong benefits – including opportunities such as partial ownership or profit-sharing – and you’ll have a strong, close-knit team who’ll stick with you and want to help the company grow from strength to strength. Hire slowly but strategically and take conscious measures to retain staff, and you’ll find that your business is well placed to beat the odds.
At StellaPop, We’re All About Making Our Own Luck
At StellaPop, the odds are always in our favor – but that’s by design. We’ve spent years building and shaping a presence in the industry that we love, planning for success, and positioning our team to achieve above and beyond. Luck has a formula, and we can say from experience that it’s the precise mix of structure, creativity, and people that we’ve worked so hard to achieve.
Need some help creating your own luck in business? Drop us a line today.