Surviving–and even thriving–after 5 years
Karl R. LaPan, President & CEO, The NIIC
No doubt you have heard the statistics that about 50 percent of businesses fail after the first five years. Entrepreneurship is not for the weak. However, what separates those who survive and even thrive from those who close shop? Surely there are some commonalities. Here are some factors experts believe can make you resilient (or at least increase chance of success):
Relevance: Your concept must have value, or it will go belly up. Does the idea/business have staying power? Why? Markets change, and so does the demand for goods. A prime example is Blockbuster Stores. With the advent of changing technology, they just didn’t keep their product offering relevant. Specifically, they did not execute on the transition from renting media to streaming services, and they eventually shuttered most of their stores. Today, there about ten stores (most are in Alaska!) out of the over 9,000 that were open in the 1990s.
Market Smarts: Don’t forget one of the basics of Marketing 101: conducting a SWOT and PEST analysis. R&D, marketing, and sales activities are expensive. Every extra bit of market knowledge reduces the number of resources expended. A clear understanding of the competitive landscape and intimate knowledge and insights into environmental scanning – Political, Economic, Socio-cultural and Technological trends are essential to capitalize on business insights and potential market opportunities.
Lean in: Most startups have blind spots they might not even be aware of yet. You must lean into your opportunities and face the brutal realities of your industry and marketplace. It is not enough to only play defensively (defending your ground against unpredictable yet potentially destructible factors like market changes, lawsuits, talent loss and more.) You must also manage uncertainties (product, financial, management, technological, execution, and market). Do you spend more time on the offensive or defensive?
Grit: You will inevitably encounter setbacks, doubts, etc., but you must persevere and overcome them. Many businesses fail just because the founders gave up when times were tough.
Seek out “trusted advisors”: You do not have to go it alone. Most successful people have a support system of some kind behind them. Need some direction or moral support? Reach out and talk to a NIIC coach. We are here to help you grow and adapt to the mindset required to own and operate a business successfully. We have a lot of business tools and insights to help you continue down the entrepreneurial road.