Anyone who has successfully started their own business likely remembers the perils and pitfalls encountered in those early years, as well as the joys and victories. It can be equal parts exciting and stressful, rewarding and exhausting.
That said, it’s not for everyone. And even for those who might seem like a perfect fit for the entrepreneurial life, small-business failure is all too common. In fact, Forbes cites a Bloomberg study, noting that, “8 out of 10 entrepreneurs who start businesses fail within the first 18 months. A whopping 80% crash and burn.”
So what can you do to avoid becoming another casualty? Below, you’ll find tips and advice from small business owners who are making a go at it…and doing so successfully. While this isn’t an exhaustive startup checklist, these big-picture areas are worth considering as you blaze your entrepreneurial path.
Plan, Plan, Plan
No doubt, you’ve been told you should create a business plan. Guess what? This isn’t some outdated piece of advice. Having a written plan forces you to think through things you might not have otherwise thought of—everything from marketing to finances to competitor analysis. You can find business plan templates online. Conduct research as well: online and in person. Understand your industry, competition, price points, and potential challenges.
Aditi Kapur is the founder of DeliveryChef.in, one of India’s leading e-commerce websites that lets hungry Indians order food for delivery from their neighborhood restaurants. Kapur says proper planning—before you launch—is essential. “I’ve only been an online entrepreneur for four years, but one piece of advice I received when I just started out was plan very well. Because once you get off the ground, all the preparatory work you do really helps a lot. And be patient!”
Of course, some entrepreneurs can stall in the planning stages. At some point, you need stop planning and begin executing, just to see what happens.
Remember, Your Website Is Where It’s At
It’s 2014. People are attached to their smartphones almost 24/7. Daily life begins and ends with the Internet. In other words, your online presence, especially your website, matters more now than it ever has before.
Tori Lattig co-founded Endless Pawsibilities, a full-service pet sitting and dog training company in New Jersey. She says that your website must be ready to go when you’re ready to launch, not afterwards. “I truly believe you need to have your site and up and running BEFORE you go live. Everyone uses the web. Clients, vendors, potential employees all want to be able to find you. If you think you can get started and THEN get your site ready, you’re sadly mistaken. Don’t start behind the eight ball.”
Having a website isn’t enough. You need to build it so that people can find you. Jenna Betchholt is the owner of Jenna Bechtholt Photography, a wedding and lifestyle photography service located in Los Angeles. Betchholt says, “Some of the best business advice that I received when starting out was to focus on my online presence. Whether you have a great product/service or not, if no one knows about it, it really won’t matter. So I spent a lot of time developing my website to attract my target audience, staying present on my social media handles, updating my blog weekly while keeping various SEO strategies in mind, and producing fresh content.”
Ah, yes: SEO (search engine optimization). Pay attention to this before you launch, or you might have to find out the hard way, which is what happened to Kathy Steck.
Steck founded DinerWear four years ago. DinerWear offers dignified alternatives to the adult bib. The company’s signature product is the Cravaat, a stylish dining scarf that looks nothing like a bib, but serves the same purpose and works great for anyone of any age who has a knack for spills.
Steck talks about how she learned about SEO. “Although I had help with my website, my website designer said nothing about SEO. Consequently, my desire to not be associated with an adult bib hurt my website ranking. Once I learned the importance of SEO (by watching Shark Tank), I implemented changes to my website which put my business on the map and increased sales 250%. If I had known about it earlier, I would have had more sales sooner.”
Understand ALL Money Numbers
You need to keep tabs on any number that has a dollar sign before it—this includes everything from expenses to how you price your products. Bechtholt says, “Starting a business can be nerve wrecking especially when you see others around you who are much more established charging four times as much as you are. If you want to be taken seriously, price yourself competitively.”
She also points out that the market for different states and cities will vary, so getting to know other people in your industry and understanding how and why they price the way that they do is so valuable.
“For example,” she says, “I moved from Utah to LA and knew I had to raise my prices. I wasn’t sure what I was really worth in this new city, but I saw people charging way more than I did. I raised my prices a bit, but then I found I was too high for the price shoppers and too low for the people looking to invest money in wedding photography. By moving my prices up even further, I actually booked more and all parties involved felt great. So do some research and understand what your services are worth in your market, not what you necessarily think they are worth.”
Hire Your “Weaknesses”
We heard this phrase from Tori Lattig of Endless Pawsibilities and found it quite apt. We also discovered many small business owners who recommended the same thing: know when to outsource to experts.
Lattig says, “I wish we hired our weaknesses earlier. For example, hiring a bookkeeper to keep our accounts and everything current each month would have saved us from doing a mass information input at the end of every year just to do our taxes.”
Robert Richardson owns Richardson Graphics, a high impact marketing company that does everything from traditional marketing to online marketing and social media. Richardson echoes Lattig’s sentiments: “Know when to ask for help. Whether it’s taxes or navigating local business laws and ordinances, there are times when you’re going to need to ask an expert. Don’t let your pride get in the way, there’s no shame in admitting you need help.”
You can often discover the expertise you need through networking groups, like BNI and your local Chamber of Commerce. There are also online resources to consider.
Tammy Bennecke is the president of Red Apple Reading, an online reading company that helps fill in the gaps in children’s reading skills. She says, “The best thing we ever did was get connected to other businesses through Elance, an online freelance community. I don’t remember how we found out about it, but we work with some really great people all around the world who we might never have known about. We minimize our overhead as a start-up by working completely online with freelancers instead of hiring employees, including program developers, animators, graphic design artists, writers, and education specialists.”
At the same time, you should avoid the “ignorance is bliss” pitfall. Just because you outsource your tax prep to an accountant, for example, doesn’t mean you shouldn’t review their work, ask questions, and understand the money numbers and applicable laws. Remember, the buck stops at your front door.
Kate McKeon is the president of Prepwise, an educational company in New York City that tutors high school and post-college students to prepare for the undergraduate and graduate school admission process. She says that you—the business owner—must remain aware: “Even when you hire an expert, they may not actually realize all the laws that apply to you, so you have to be the one to understand all of the legal and accounting pieces.”
Get Emotional Support
Being an entrepreneur can be lonely, especially in those long, lean early days when you’re working 24/7 and doing so much yourself. Your family and friends can offer just so much emotional support. Unless they’ve owned or worked for a startup, they’re not going to fully understand the challenges you face or why certain victories feel so sweet. That’s why finding kindred spirits is critical to your emotional health.
Lori Osterberg owns VisionOfSuccess.com. Osterberg is a serial entrepreneur—she’s been in business for over 20 years. VisionOfSuccess.com is her third company, which she started in 2001. She can’t stress the importance of networking enough.
She recalls, “When I first set out on my own, what was hardest for me was not to have a support team around me. All of my family and friends had jobs, so I never had anyone who understood my path. If you’ve ever had the blank stares from people as you talk about issues you’re facing, you’ll understand the frustration I felt in those first few months. I attended a seminar and found more people like me in my community. We agreed to meet for dinner, and after that we formed a group that met once a month to talk about our successes and failures, and that’s what literally changed my approach to business.”
Osterberg recommends finding a small-business networking group in your area. Join and become as active as possible. Consider getting a mentor as well. “Find another business owner in your field or niche and follow them…attend classes, buy their books, get their newsletters. Learn as much as you can from them and incorporate it into your own business,” she says.
Richardson adds, “It’s all about relationships, so don’t neglect how important it is to make connections throughout the community. Take a little time every week to reach out to other business owners. Attend networking events, industry workshops and take the time to meet people in the community.”
Bechtholt agrees and notes that networking can exceed your expectations. “You can actually make genuine friendships with these people, and being involved in your industry never hurt anyone. This is a great way to gain referrals and spread the word about your new company.”
What do you think? What other tips and advice would you offer someone who is thinking about launching a new business? Share in the comments.