In the beginning of the year you promised yourself that you would get your best idea off the ground. This would be the year that you would make it happen. You would take small steps and with each one come closer to realising your goal. But now that the year is nearly over how far are you? Is it time for a review?
A product I’ve been working on reached a critical stage. The unit cost was much too high. I have had to find alternative suppliers to get the unit cost lower. This is the thing, it can take three times longer than you thought it would to bring your business plan into fruition and the costs magically double.
If you have not carefully thought through the development of your product you might find yourself in a situation where further progress with your product hinges on one key supplier. For example, you might need the services of a specialised designer but find that you don’t have the contacts or personal network to find someone that it’s competent and trustworthy. This means that you need to go about conducting an extensive search for a product designer.
It is perhaps a good time to re-evaluate your goals and see if you haven’t overreached yourself. It’s important to stretch yourself but you need to take care not to push all your energies into something that’s not going to work. You also have to be careful that you don’t overspend. If your unit cost is too high, it can affect everything that you do.
Research shows that a high percentage – something like 80% – of new businesses formed each year fail within two years. Often the problem is that the start-up owner can under-estimate the demands of bringing a product to market. It’s not just about the energy, motivation and granite perseverance you require to get something new off the ground; it’s also about good planning and detailed preparation. The flood of entrepreneurial success stories are important for motivation but rarely do we see the struggle and failure stories of would-be entrepreneurs who tried and tried but didn’t make it.
This is why it’s important to ask yourself some serious questions before you start out:
Are you a self-starter?
Can you handle the physical and emotional challenges?
Do you really have a product or service for which there is a long-lasting demand?
Do you have the resources to help carry out your business plan?
What kind of people and what attributes do they need to help make your business possible?
How are you going to bridge your gaps in business experience in the market you are entering?
You could add many more questions to this list. But if you haven’t carefully answered just this handful, then you may be in for a possible nasty surprise down the line.
Some people view business plans with contempt. The argument goes that with a start-up things are so volatile that you don’t need a business plan. The problem with this thinking is that it misses one important point: the business plan of any length, whether it is a one-page business or marketing plan, allows you to think through what introducing a new product, service or venture will require. A business plan even if it is one-page plan should cover all the areas that will need to be included to make your small business successful.
If you have reached a point in your start-up product, service or new venture way you are stuck or overwhelmed, why not shoot me an email or give me a call.