Every year, tens of thousands of people decide to start their own businesses. What they may not realize is that nearly 20% of all new businesses will fail within the first year, and 65% will not make it a decade.
There are plenty of reasons why this happens, and most of the time it isn’t because of a lack of effort. This article will hopefully provide some tips and insight to consider before starting a business or deciding how to run a new business.
Find a Niche in the Goldilocks Zone
You’ve likely heard the story of Goldilocks and the Three Bears. In the story, Goldilocks struggles to find comfort with various items because they are either too big or too small. It isn’t until Goldilocks tries out a few options that she finds the item that is “just right.”
The same goes for running a business and understanding a market. Starting up a sports podcast about sports in general may be too big. ESPN, CBS, and big name podcasters like Jim Rome and Paul Finebaum are going to dominate the search results and SEO rankings on all search engines. In other words, nobody will find the podcast because sports is too big of a topic.
On the flip side, if you decide to start a podcast on the high school basketball recruits in Lawrence, Kansas, the competition may not be there, but the potential market size is also too small. There are not enough people interested in that particular area to bring any kind of significant traffic or money.
The answer may be somewhere in the middle. Perhaps the podcast needs to be about high school sports, and the top recruits in the nation in both football and basketball. Now, that’s a market that’s interesting, but it isn’t as broad as the big-name podcasters.
Put Money Into the Company
Putting money into a business is crucial. This can be the nail in any business coffin if done incorrectly. Many startup business owners are worried about putting money into advertising, hiring professionals, and giving out promotions.
There certainly needs to be a limit, but any successful businessperson will tell you, the most important part of growing a business is to raise awareness. You may have the greatest invention of the decade, but if nobody knows about it, it will fail.
Obviously putting money into anything is a gamble. However, like any gambler will say, the more that’s invested, the greater the potential payout. What that looks like to each startup business is different, but understanding this concept is important.
Use the Professionals
There are many other strategies and concepts to consider when starting a business, but perhaps the most important is to hire professionals.
Whether it is using a professional recruiter to find talent, utilizing the skills of a graphic design artist, or having someone run SEO and advertising, it is crucial to not try to do everything on your own.
Again, this can get tough for some, because it can be seen as lost money up front, but ask yourself, would you hire a dentist to sell your home, or a lawyer to perform brain surgery? Odds are startup business owners have a very good skill – creating or using the product they are trying to sell. Perhaps they also have skills with Photoshop, but very few people have all the skills to do everything related to running a business at a high level.
One example of this can be with advertising. A professional may know that ads which run from 8:00-11:00 PM on Thursdays do very well with a certain demographic, but that same demographic may be non-existent on Friday at the same time. These agencies spend thousands of hours and dollars looking at market research that simply cannot be matched by a business owner with no experience.
Running a business has ups and downs. Having patience and understanding that not every aspect is going to be perfect is essential. There are going to be sunk costs. Getting desperate and making rash decisions because of one setback can be the quickest way to lose a business. Utilizing the tips mentioned above and learning from mistakes can help a business survive the first year, and perhaps make it in the 35% who get to have a 10-year anniversary.