Secrets to Creating a Successful Business

Say you have an idea that you think will make you tons of money so you start your own business. What do you do to give your business the best chance of survival anda success, knowing that according to the SBA (i.e., U.S. Small Business Administration), approximately 90% of all startups fail within the first year of operations and over 80% of the remaining businesses fail within the next 2 years.

Why do so many businesses fail in the first 3 years of operations? Some common explanations include - they didn’t have enough money, their business plan was faulty, they didn’t execute their business plan properly, or the founders didn’t have the proper skill-sets. These may all be true, but are they the real reasons for the demise of these startups?

For example, during the dot com craze a few year back, many venture capitalists invested millions of dollars into many Internet startup companies. Most of these companies failed. Almost all of these companies had highly skilled lawyers, accountants, marketing consultants, programmers and other experts working for them. Their business plans looked so wonderful with all those nice shiny pages of pictures and graphs showing how much money they were going to make for their investors. Yet most of them failed. Why?

With all these so-called experts working for them, why did many of theses companies run out of money? Were their business plans based on faulty facts and assumptions? Did they not execute their business plan properly? What did their experts tell them to do? With all their high price help, what happened?

On the other hand, many successful businesses started with no formal business plan, limited resources and yet they grew and prospered.

The key to any successful business or project is establishing a strong foundation for the business to grow. Just like a building will collapse if the foundation upon which it is standing is weak, a business will collapse if its foundation is weak.

Starting your own business is a lot like getting married. If you are getting married because your future spouse has lots of money and by marrying him/her you will be "set for life", then what do you think your spouse will feel when he/she finds out that you married them for their money? Do you think they would have married you if they had known this critical fact in advance? What kind of relationship will you have in this kind of marriage?

If your primary purpose for starting a business is to just make lots of money, then why are you running "this" type of business versus another type? For example, if your motivation for getting into the restaurant business is just to make lots of money, why not start a business cleaning clogged toilets or digging ditches? The money is probably better and so are the hours.

If you are just looking at the money, then who is looking out for the customers? Customers can sense when you don’t care about them, and know you only want their money. There will be no customer loyalty. People will buy when the price is low and they will leave when the price is high. Your goods and services will become commodities, subject to the uncertainties of the marketplace. The business may survive for a few years, but eventually it will die out.

Understanding your true intention for starting the business is one of the keys to success. When you execute your business based on your true intentions, the money will come. The goal of any business is to make money. The intention of the business has to do with something else. How many times have you heard someone say - I am making money doing what I love? You too can be doing something you love and making money doing it. The key is understanding your true intention for going into the business in the first place. It’s the same as getting married. Know the real reasons you got married. It’s the difference between having a happy experience or having a nightmare, but that’s another story.

Related Articles: