In today’s entrepreneurship model, women who start companies in their fifties are a fast-growing group. By the time we’ve reached 50, if we’ve had kids they’re either fully or at least partially grown. We’ve led full and complex lives. Then we reach a certain age and often discover we have all this pent-up creative energy that we can put toward creating – whether it’s a passion project or the next big thing. It’s our time.
More and more, we are seeing platforms such as Midlife Slices giving much-needed space to these remarkable women who are making their biggest impact yet. I’m passionate about inspiring and helping women overcome some of the unique challenges of being an older woman entrepreneur, and blow others’ expectations of them out of the water in their second act.
It’s understandable, even admirable, how new business owners, drunk on big dreams and dulled by the daily grind, can sometimes be blind to business risk. But starting a business is a lot harder than most people think.
Rarely is a business so in tune with its niche that it can float along with minimal effort. But why do so many new businesses fail? Below is a list of some obvious (and some not so obvious) reasons that startups fail, and how to avoid them.
1. Not doing your homework
Possibly the biggest and most risky mistake you could make is launching headlong into your business without doing any research, testing, or planning. Researching your market, learning about your potential customers’ purchasing behaviours, analysing your competitors, reviewing current trends in your industry and so on are all vitally important. Record it all!
Write a business plan – even a 1-page plan is better than none.
2. Your company culture’s not right
A company culture in which your team is truly committed to the company is the culture that gives you the most chance of success. And that commitment culture starts with you.
You need to foster this inclusive culture every step of the way. Every new person you add to the company either reinforces or risks damaging the culture you’ve worked so hard to foster. So be careful with who you bring into the company.
3. You have the wrong team
Don’t settle! You need everything to be right between yourself and your team if you’re going to succeed. This doesn’t mean you can’t have differences between each other. It does mean that you need to maintain mutual respect despite your differences.
You’re going to want your team members to have integrity, be smart, be passionate, and be a good cultural fit for the company. Not all of these traits will be obvious when you bring on someone new, so make a concerted effort during your recruitment, interview, and on-boarding processes to find someone who meets all your needs. Again, start with cultural fit and go from there.
4. You don’t have a good market strategy
It’s not enough to have a great product. The days of ‘build it and they will come’ are long gone. Having a website is not enough. Having a dedicated sales team is not enough. Having an advertising budget is not enough.
You really need to think about and properly consider how your customers are going to find you, how to ensure they really engage with your brand, buy your products or services, and how to maintain a meaningful relationship with them. And then, you’re going to need to figure out how much it’s going to cost you!
5. You don’t have a solid financial plan
Be honest. How many of you don’t know exactly how much money you are making or losing in your business? I’ve seen the lack of a well thought out financial plan sink a lot of startups, so here are some basics to think about:
- You should know how much money you are spending every month
- You should know how much money your product or services costs to produce
- You should know when your company will hit cash-flow break-even
- You should know the revenue level at cash-flow break-even
Develop a financial plan today if you haven’t already. It doesn’t have to be complex. There are lots of free templates online, such as this downloadable Cash Flow Forecast template from NAB.
The new business bottom line
It’s often reported that anywhere from three quarters up to a staggering 90% of Australian startups are likely to fail. That’s a very high number, indicating that many things need to go right for your business to succeed. Fortunately, you can be one of the 10% that do succeed by bearing in mind the tips outlined above, starting with your groundwork before jumping in with both feet. Good luck!