Introduction
Lets set the scene - you are an entrepreneur who has invented a great idea, or perhaps you are a owner in a larger organisation who is about to get underway the firm into new goods territory.
In whether event, you're planning to start a new investment or company.
Actually, statistics will tell us that unfortunately most new businesses fail - but don't give up yet because I am about to offer you ten pure gems - a set of rules to help you avoid the ten biggest reasons why new ventures struggle.
I do not claim to have invented these rules; they are tasteless sense really, but I have become increasingly aware of them over the years - and they come from talking to real habitancy who been there and done it. Adopt them speedily into your new investment to give it the best opportunity of success.
Along the way, you will find that there are other problems to solve that are not covered here as your firm grows and develops, but these are the first ten to think about and many of these apply to any business.
Step One - Get the goods positioning right
This is often the first place that many ventures fail. How often have you sat in a goods meeting where the speaker has simply described a list of things that the goods will do - its features and functionality.
While this facts is unmistakably important, and customers will need this, your goods idea needs to be Very clear about why it should request for retrial to a prospective customer. You need to apply the "so what?" test.
For example - "Our new patented active Pa law has a frequency range of 100Hz to 10kHz, is rated at 1000 watts Rms and weighs only 10lbs per speaker"
"Ok - So What?"
Instead, how about
"Many travelling professional musicians need high ability Pa equipment that they are familiar with and trust.
"Equipment at venues is of variable ability which means that musicians tend to take their own gear which up to now has been based on bulky, heavy, primary technology or they make do and suffer the potential consequences to their reputation.
"Our new, patented active pa law has high power and superb clarity, performing at least as good as Brand X (the benchmark competitor).
"But weighing in at only 10lbs per speaker means that the whole law can be carried in a small bag in the back of a saloon car rather than a van."
You have just defined how your goods solves real pain felt in your target market.
Take time to get this right - test it on friends in the firm - a proper goods positioning statement is prominent because these ideas will drive all things you do to market and sell your product.
Step Two - Don't' define your offer too broadly
This one is a real killer. The accurate goods positioning is crucial and what happens is that your idea is whether not defined in a sufficiently challenging way (see Rule 3), or its defined to broadly, or both.
Your idea does not need to request for retrial to everyone - it needs to be very exact so that potential customers know exactly what you do. It saves wasting time with prospects who will simply never buy your idea or goods and it puts off those who would if they unmistakably understood what you can offer Them.
Its unmistakably prominent that your firm is known for something, which means that habitancy also understand what sort of firm opportunities are not part of your offering.
A broad canvas is also a big mistake in defining your target routes to market.
You need to gain credibility in the market and, with the big players such as large retailers, you only get one shot. Fail with that one shot and you may take years to get an additional one chance. Be narrow in focus initially and gain success there first.
"Narrow your contribution -be the expert in your field."
Step Three - Never fear failure
Its unmistakably easy to procrastinate - there's not sufficient data - you need to fine-tune the plan (if you have one see 8) - you combine on the easy things like the goods itself.
In other words you are spending your hours in your relax zone - when you need to Do some thing.
You need to take action, make the tough decisions, step out of the relax zone and get the idea moving. This is the excellent behaviour of many entrepreneurs - they do things they make things happen they make mistakes and learn by them.
You will only unmistakably find out how good your idea is going to be if you start getting some traction with it amongst your target market; and this preliminary feedback will be 24 carat solid gold in terms of perfecting your goods and at last in creating a sustainable sales platform. Your response to any issues that do get thrown up will also define you as a provider that can be trusted.
Step Four - Don't give up too soon
There will be setbacks. Get used to it, but institute a persistence to enable you to succeed.
Many clients I have worked with cite persistence as the guess that they ended up doing firm with some of their better customers. Remember that "no" is rarely a "no, not ever" in sales and firm amelioration especially if you have done your targeting correctly and aren't trying to sell to the wrong client. Timing is crucial and a "no" normally means "no, not now" - even if its not articulated that way.
Step Five - Build a team and a strong one
If the goods was your primary idea, you are the creator/inventor and you need help. And you will need to step out of the relax zone and get the right habitancy in for the next job in hand.
You will need a combine of specialists to take 2 key jobs away from you - and you will need to get used to the idea. You will need a industrial expert to tackle firm amelioration (plus any preliminary marketing) and you will need person to run the executive and finance side of the business.
This is a unmistakably crucial part of the amelioration of the fledgling investment and there are a combine of ways to go about it.
But you need to build that team.
If you are lucky and have an existing base of contacts who can furnish these habitancy one way or another, this will get you permanent team members, or you can bring in hired guns in the form of interims.
Permanent is risky because there will be all the attendant issues with salaries Ni, Paye and observation periods. Interims are results driven, normally over mighty for the job and are very accustomed to picking up new challenges at the drop of a hat. Interims need only paying when an invoice appears. Don't rule out whether selection and you may be able to go with a mix of the two.
Also bear in mind that many interims and freelancers are happy to work part time to a budget you set, and you probably won't need say an Fd full time for a while anyway.
But anything route you take, you need to build a team for a very good guess - perceive tells us that unmistakably creative habitancy do not normally have the skills or desire to attend to the minutiae of running a business. You need person to bring in orders for your goods and person to turn them into cash.
Step Six - Don't try and do it all yourself, get professionals
There are going to be some things that you will need to do yourself - simply because there will be too much to do.
But it is a false economy to do your own accounts, marketing, design, legal work, Hr - these are crucial areas of the firm that need expert resource.
It will cost you money, but will cost you less than the damage you could potentially cause by doing it yourself badly. Ask yourself if you are unmistakably that good a website designer, just because you can program a bit of html.
Factor these in to the plan (you do have a plan don't you? See Rule 8) and fund it properly.
Step Seven - Make any changes speedily
If you go down the permanent recruitment route, collate very speedily whether or not the team is working. If everyone is on the same page then break out the bubbles, because you've done well.
This team will be your interface with the outside world, your prospective customers - in other words your future success or otherwise. This team will record your firm and you have to be unmistakably clear that they are going to gift themselves professionally, because by doing so they are the image of your business.
Remember Gordon Gekko in the movie Wall St - you need to be just as ruthless (well nearly!); do not hire if you have the slightest misgivings about e.g a potential Finance Director.
Its better to go back to the drawing board, or get an interim, than to recruit the wrong guy in the first place. And if you realize you've made a mistake then like Gordon Gekko - cut your losses quickly. You cannot afford to make costly mistakes so be aware of employment law get expert guidance first.
Step Eight - What no Plan?
It's an often repeated that, if you fail to plan, you plan to fail. This may be trite but it is true. You need to plan everything
"Plan the work - work to the Plan!
and, if you aren't good at it, get person who is, or at least get something anything - down on Paper.
You need to put down a roadmap to goods get underway - times, dates, versions etc. You need to recognize where the income will come from ie routes to market. You will need to plan how you will reach those prospects ie a marketing plan. And finally you need to put numbers down for costs and sales income on a monthly basis.
You may need a expert to do this for you, but the plan is non-negotiable.
Step Nine - Make it a working Plan
The plan is done once a year and we never look at it again right?
Wrong!
Many habitancy write a gorgeous and detailed plan and then put it in the lowest drawer and forget about it. Its much more fun manufacture challenging new developments to your goods range - than to monitor improve on your plan.
But its crucial that the plan is a working document that you reveal every month with the team members. Sole traders, reveal the plan yourself or generate a virtual board straight through your firm network (call me - I can put you in touch with some great people). You need to focus on what happened to take you off track, and to take medicinal action to bring you back to plan.
Its crucial at so many levels - with a proper monitored plan your cash requirements become safe bet (see Rule 10). And in firm amelioration and marketing, its crucial that you are driven by the timing plan to keep the sales funnel filled with potential clients.
Step Ten - Cash is King
I've left the best till last. They say in golfing circles that you drive for show and putt for dough - I think it was Lee Trevino who came up with that one; but in firm its true that income is for show and behalf is the real dough.
But even if both are compromised and you are failing to meet whether the income or the behalf targets - or both - you can still survive, and many businesses operate with losses and get away with it for a while.
However, one thing that every firm needs to fuel growth, and the lack of kills a firm quicker than all the rest, is cash.
Probably the particular biggest killer of new ventures is poor cash management.
Which is why you need that boring old bean counter, because your sales guy is out there bringing in the business, but you have to realise the value from it quickly, which means chasing each invoice as if it were your last - obviously diplomatically and without upsetting the fledgling industrial relationships that are starting to appear.
And this last point if very difficult if you are servicing large companies, habitually they are poor payers and you will need to think about this early in the planning process and then in subsequent negotiations.
Conclusion
Ten basic rules to keep your new investment from the bad end of the statistics.
These are all tasteless sense unmistakably but, as I said at the introduction, there will be many more problems to solve as the firm develops and grows.
If you are a technology-based investment you will need to be involved with how to protect your Intellectual asset Rights, Patents, and there are lifecycle issues and firm models unique to technology-plays that you also need to understand.
I wish you well.
Matthew Simmons
10 Steps to Success in New Ventures