The Small Business Association (SBA), states that only 30% of new businesses fail during the first two years of being open and 50% during the first five years and 66% during the first 10.
The SBA goes on to state that only 25% make it to 15 years or more. Another study by Harvard Business School study by Shikhar Ghosh shows that 75 percent of venture-backed startups fail while another study Statistic Brain, Startup Business Failure Rate by Industry, the failure rate of all U.S. companies after five years was over 50 percent, and over 70 percent after 10 years.
However, not all of these businesses need to fail. With the right planning, funding and flexibility, businesses have a better chance of succeeding.
Hosted by Harry Hare, a serial entrepreneur, Chairman and Publisher CIO East Africa and Founder and CEO DEMO Africa, Harry shared a myriad of things that entrepreneurs face before they reach the success curve.
From, failing in business to Intellectual Property (IP) and how businesses can actually drive local investor conversations.
On IP, Harry noted that on instances where one can’t patent or IP a product especially on software products, execution can be your best protection.
‘’Execute ruthlessly and furiously. Raise the barrier to entry,” he said.
And on driving local investors conversations, he noted that start-ups and businesses seeking investments mostly fail to secure their investments because their pitches are mostly complex.
“While driving your conversation with local investors you keep it simple and just demonstrate your path to profitability, ROI and use growth metrics that investors understand. Don’t use jargon,” he added.
In addition to that, here are the six takeaways from the session.
Business makes sense when there is a purpose
You need to have a driving force despite the money and glamour. Every one of us is working towards something, be it getting through difficult times in life or bettering ourselves at a hobby or desirable trait. Everyone has a sense of purpose; without it we lose our way and become demotivated and depressed. Studies have shown that when people are contributing to a higher purpose, they are likely to have a healthier outlook on life and be more resilient to stress. The same is true in the workplace and in your business.
Stay true to the mission
If you want to be successful you need to stick to your mission. Put what is required of you to the mission and work towards. The mission is equally important as it serves as a guide for all the company’s decision-making. Shareholders, leaders and employees are generally the target of the mission. It should help workers within the organization know what decisions and tasks best align with the mission of the company. Your mission is the primary purpose for being in business. Some companies have profit-motivated missions, while others make customers a focal point. Other firms use a mission to point out more altruistic intentions that ultimately lead to profits.
There is so much destruction and noise happening. Learning how to focus on the task at hand may be tough, but it’ll make all the difference in terms of your productivity and the quality of your work. Try and stay focused on your course. If there’s one thing that truly separates the leaders from the followers, it’s the ability to maintain a solid focus on your work, to get in the zone and get stuff done! Yet, the fast pace of modern society has made focusing on the day’s dealings more difficult than ever.
Get to know what competition is doing
All businesses face competition. Even if you’re the only restaurant in town you must compete with cinemas, bars and other businesses where your customers will spend their money instead of with you. To be successful, you really need to know who your competitors are, and what they offer, can help you to make your products, services and marketing stand out. It will enable you to set your prices competitively and help you to respond to rival marketing campaigns with your own initiatives.
Always remember Clarity and simplicity on objectives, target customer and path to profitability
Simplicity is equal to Focus! Keep everything simple and easily understandable to your clients and employees. Simplicity makes your goals easily achievable. Successful businesses grow over time. Too often, however, as businesses grow, they take on additional complexities. Such complexities may detract focus from a company’s primary mission and purpose. A healthier way to bring about business growth is by mastering simplicity. Organizational leaders can take the first steps to achieving simplicity by staying focused on defined goals and eliminating processes that deter from those goals.
Allow criticism, it enriches you and what you are building
When your business is criticized, you might take the criticism negatively and respond accordingly. The key lies not in how you react but what are the takeaways from criticism. You should use this criticism positively to see your business grow and better establish itself. It is important that small business owners develop a tough skin that allows you to go through these challenges.
Want to join our growing business network? Book a tour today at any of our branches and check out our amazing packages!