According to Australian Government data, 424,144 ABNs expired last year. With so many business ideas failing to get off the ground or struggling to scale, it raises the question, where do they go wrong?
There’s a myriad of reasons a business can go belly-up, and for many of them, it happens within the first year of starting. Last year, a survey of nearly 1,000 Australian small businesses and found that one in three are afraid they’ll have to shut up shop within the next three to five years.
With so much uncertainty in the air, it’s no wonder people are afraid to start a new business venture. Here are eight tips to help you along the way, and, of course, keep that ambition alive.
Assess your business frequently
It can be easy to get lost in the day-to-day of a business, especially in the beginning, but it’s important to assess the health of your venture often.
A good way to do this is to use the SWOT model to build on strengths (S), minimise weakness (W), seize opportunities (O), and counteract threats (T). This is best conducted with a particular business objective in mind, like, for example, deciding whether you should raise the price of an item.
You can see an example of SWOT analysis here.
Isolate what makes your business special and amplify it
While there’s always room for more than one player in any given space, the ones that succeed often have something special that its competitors don’t. Look at the consumer computing industry, for example. Microsoft offers customisation at the core of its Windows products, while Apple opts for usability above everything else. Both companies are capable of meeting the needs of the end-user, but each method is unique and executed well.
On the smaller end of the spectrum, Thea Mendes, the owner of DOMUTS, a small business that sells donut-shaped treats for dogs, hit hard times when she struggled to scale up her venture. After getting back on track thanks to assistance from CGU Insurance, she says her biggest tip is to, “Do your market research and then find a clear niche for your product.”
Once that special sauce is isolated, amplifying it will help your business stand out against competitors.
Move with trends, and do it quickly
Agility is important in any industry.
As a business owner, identifying and moving with industry trends is important for maintaining relevance, particularly in today’s fast-moving economy. This all comes down to ensuring your business is able to shift quickly if needed.
Ask yourself how you can be a leader when it comes to emerging trends and take advantage of the opportunity, rather than simply keeping up with the rest of the pack.
Prepare for failure
44% of Australians say that a fear of failure has stopped us from chasing our goals, according to research by CGU Insurance. The best way to deal for failure is to be prepared for it. It may sound a little grim, but if you have an adequate strategy for dealing with the unexpected, you’ll fare much better than you would without it.
Being comfortable with the possibility of failure will ensure you’re in the best mindset to bounce back. As CQS International founder, William Nobrega says, “You will run into obstacles all along the way, but how you deal with them and how you overcome them will determine your success.”
A positive mindset can absolutely make a difference
There’s no shortage of research on the power of positive thinking and the outcomes it can have on skills, health, and career. One such study found that the happiest people often attribute at least part of their successes to optimism and a positive outlook.
Whether it’s simply an enhanced ability to better cope with the stresses of running a business or the willpower it helps cultivate, maintaining a positive mindset can help you keep your business on the right track, which is something late Apple co-founder, Steve Jobs agreed with.
“I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance,” he said in 1995. “It is so hard and you pour so much of your life into this thing, there are such rough moments in time that most people give up. And I don’t blame them, it’s really tough.”
Ambition is key.
Set out a business plan before you start anything
Starting a new venture can be exciting, and it’s tempting to simply dive straight into the nitty-gritty before doing anything else. If Mendes could do DOMUTS differently the first time around, she says she would have taken her time planning it out before anything else.
“If I had my time again, I would start by developing a clear business plan from the outset rather than just get going,” she told Business Insider Australia. “If I had a business plan, I would have known at what point I could have scaled the business up to meet the market demand.”
She also says that if you’re struggling at any point, seeking the help of a business advisor can be a massive help.
“The advice I received from David [Stefanoff], the business mentor CGU has provided me with, has been invaluable. He’s helped me formulate a clear business plan with a clear timeline and objectives,” Mendes said.
It can help to tick off the following points when formulating your plan.
Research, research, research – what does the market look like for your business?
Calculate costs for creating your product and running your enterprise
Determine the best business structure
Check out the competition – are they successful? Why/why not?
Find out what business insurance you’ll need
It’s easy to get caught up in the excitement of a new business and simply take it day by day, but try and focus that positive energy on creating some goals to achieve over the short and long term.
Most importantly, you should create S.M.A.R.T. goals: specific, measurable, achievable, realistic and timely.
Find a mentor
“Successful people rarely achieve what they set out to without support, and usually lots of it,” Stefanoff says. After helping Thea with the practicalities of DOMUTS’ relaunch, he took on a mentoring role to keep her on the path to success.
Some business owners will have had their own mentors and want to pay it forward. You might find relevant business groups, or connect with people via local markets. Surround yourself with people who want you to succeed, and return the favour when you can.
Below are some helpful tips when it comes to finding expert help.
Find local networking groups
Investigate formal mentoring and leadership programs
Look to successful entrepreneurs for inspiration
Approach more established entrepreneurs as potential mentors
Engage your service providers for extra help and support
DOMUTS is now set to make a comeback, proving that anyone can bring their business back from the brink and revive their ambition if they really want to.
Ignite your ambition today and apply for a CGU Insurance Ambition Grant HERE.
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