ASK ALAN: Will my new business succeed?
Ideas and advice for entrepreneurs and small business owners
“If it’s true that 50% of new businesses fail before the 2nd year, how can I avoid becoming one of those statistics?”
– R. Peters, Huntersville
Many entrepreneurs and small business owners are passionate about their ideas to start a new business. Unfortunately, most of them are surprised by how many details are needed to create a successful business plan. Also, by the amount of work it takes to start and manage a successful business.
Ask yourself and any business partners, the following questions to evaluate the probability of your success before you start your business.
Market: is there a market for your great business idea?
Many business ideas have too small or, no market willing buy your product or service. Identify and “size” your potential market before you go too far!
Capital: how much money will be needed to start and maintain my new business?
It is never too early to consider raising capital to fund a new business idea. Running out of money is the most common reason why most new business fail.
You’ll need enough money to carry your business for at least six months. What if you purchase 5,000 of your products for inventory, but only half are sold? Or, demand is so great that you sell more than planned? Consider each scenario with a contingency to minimize exposure.
Service providers are the same but different. Services must be able to “scale” (expand or contract), as necessary.
.Advertise: can your idea be promoted and marketed?
If your idea cannot be promoted or marketed, stop here. Do not continue to spend unnecessary time or money.
Sell: can your business idea be sold?
If yes, via what channels and at what cost? Some methods include: direct sales, wholesale, retail, resellers, Internet, multi-level, mail order, catalog, kiosks and others. Each method has benefits, costs and limitations. Regardless, entrepreneurs should always have a back-up plan, (a “plan B,”) or risk losing everything.
Deliver: can your great business idea be delivered?
No business should ever be caught in the situation of selling something they can’t deliver.
Service: how will your idea be serviced and maintained?
The importance of creating a plan that provides for contingencies cannot be overstated. The business plan must include solutions to unanticipated problems that may occur with the delivery of a new product or service. If there are no back-up plans, then stop until practical solutions can be created.
Price: can you charge for your idea?
Many business ideas fall apart here. If there is uncertainty regarding your ability to collect for what’s been sold, stop until this component can be resolved. It just doesn’t make sense to promote market, sell, deliver, and maintain a product or service that cannot be billed.
The answers for success
Your answers to these questions can help identify areas that need attention. You will save time, energy, money and relationships. Every business idea should be evaluated, researched and rigorously tested to ensure the best possible chance of success.
If you have a small business question email it to Alan: alan@alan-adler.com
Questions may be combined and answered in an upcoming column of “Ask Alan!”
ABOUT ALAN: I coach individuals and high-performing successful business leaders. In addition to one-on-one coaching, I host confidential, non-competing, peer mentoring advisory groups. I have created several businesses including Party City Corp. and my current, Alan Adler & Associates, LLC. My experience also includes being the national spokesperson for one of the world’s largest corporations. I’ve written two books about my business passions, “Getting the Fish to Swim to YOU & Keeping Them in YOUR Boat” and “UpStream.” Both are available on Amazon.com. I live in Huntersville, NC with my wife Mindy. We have two grown children, two grandchildren, and a rescue dog named Bentley.
I work in person or virtually via Zoom
Phone: (704) 948-4341
Email: alan@alan-adler.com
