Starting your own business is the dream of every would-be entrepreneur. While it is a huge undertaking, the rewards of owning a business have proven to be worth it for millions of people all over the world. In this article, we will talk specifically about how to start your own business and how to make it successful.
We have all heard the statistics about the high failure rate of new businesses:
- Roughly 20% of small businesses fail within the first year.
- Roughly 33% of small businesses fail within two years.
- Roughly 50%of small businesses fail within five years.
- Roughly 66% of small businesses fail within 10 years.
As these numbers suggest, starting a business and having a successful business are two vastly different things. Knowing how to start your own business the right way can mean the difference between long term success and failure.
There is an old saying that people don’t plan to fail, they fail to plan. There is a lot of truth to this. Starting a business is more than just coming up with a good idea and jumping in. You need to have a plan for success, and that means you have to know how to set and achieve goals.
From the time you get that (Eureka!) moment up until you open the doors, every decision you make will impact the business. So, it is important that you carefully evaluate every aspect of your business.
1. Evaluate Yourself
The cold hard truth is that good business ideas are a dime a dozen. Realistically, the chances of your idea being so unique as to be revolutionary are slim to none.
This does not mean that you should abandon it. It just means that you will need to do more than just bring it to the market. The phrase “If you build it, they will come” works better in movies than real life.
Be Honest – Doing honest self-evaluations are notoriously difficult. Humans just are not particularly good at accurately evaluating themselves.
Here is a quick little experiment you can do with any group of 10 or more people. Ask them to hold up a hand if they know how to drive a car, virtually 100% of hands go up. Then, ask them to keep their hand up if they are better than average drivers. 90-95% of hands stay up.
So, what does this tell us?
Because it is statistically impossible that everyone is “above average”, it illustrates the phenomenon called the “Dunning-Kruger Effect,” which is a cognitive bias in which people wrongly overestimate their knowledge or ability in a specific area. This tends to occur because a lack of self-awareness prevents them from accurately assessing their own skills”.