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We have mentioned in previous articles the staggering rate of failure among start-ups, and that this is to be expected as it is a law of nature; ‘that which is new is at greater risk’!
We also listed the principal reasons start-ups fail:
- Cash (lack of it, or miscalculating the amount required for start-up and growth)
- Market need miscalculation
- Competition
- Poor business models
- Regulatory changes
- Pricing / costing issues
- Team issues
- Timing
- Inferior product
As can be seen, most of the above reasons for start-up failure are controllable and therefore manageable.
And this is the point of this article.
While each start-up is new, business management is not, and administration is generic to all businesses. Therefore to reduce the inherent risk of starting up, it is valuable to ensure competent and experienced management.
Business management often boils down to possessing and exercising several key skills. These are the top business management tips you can use to help your start-up succeed:
Self-awareness and the ability to know your weaknesses and flaws
Before starting a business you need to ask yourself if this is the job for you. Entrepreneurs receive a lot of social credit and the media creates the impression that it is a glamorous lifestyle. It is not. A very small part of the population is actually cut out for initiating a start-up. Take time to ensure you have the personality profile required to succeed as an entrepreneur. It might be worth reading: “12 Characteristics & Personality Traits Great Entrepreneurs Share” and “Six Personality Traits Of Successful Entrepreneurs”.Clearly define your business vision and goals
A vision and a plan are essential for business management. Done well, they will give the business direction and enable you to set realistic and measurable goals.Take control of your company’s finances
Management of your business finances is a crucial part of effective business administration. As CEO you don’t need to get lost in the details but in order to make profitable decisions, you will need to understand your business’ finances. While there are many reasons to start a business, at the end of the day, if you want to succeed, you must maintain the awareness that profit is the principal purpose of your business.Listen to your customers
Customers are the driving force of your business; pay attention to what they say about your products and services. Seek their advice regarding what makes them happy or frustrated about your business, and make the changes as a matter of urgency. Remember that in business sales is everything – and sales is a direct result of customer satisfaction.Listen to your team
Ironically, effective leadership starts with listening. Visionary CEOs are known for hiring excellent staff, and what’s the point of hiring competent employees if you don’t listen to them and allow their influence to guide the business? Learn to surround yourself with people who take ownership of their responsibilities and who aren’t afraid to express their ideas even if they clash with yours.Establish good relationships
Though it’s not apparent, good relationships define business success. The relationships you foster with customers, suppliers, staff, and all other stakeholders will define your success. So, develop the habit of creating effective and positive relationships with everyone all the time.Resilience
One thing that all successful entrepreneurs and business owners have in common is the ability to persevere through difficult times. Remember: business is not easy, it requires grit, facing adversity, and pushing when you feel like giving up. It’s important you believe in your business more deeply than anyone else so that when others might be willing to quit, you don’t. It has been said that resilience is the single most common quality of successful entrepreneurs. Develop your tenacity and resilience.
Start-ups that last
It’s worthwhile at this point to direct you to an article in the Harvard Business Review entitled: Start-Ups That Last. It’s more in-depth than this article but is well worth the read.
Here’s a summary (taken directly from the article):
Why do so many promising start-ups go off the rails? Often they have trouble scaling. Founders may resist imposing discipline for fear of losing agility and control – but the price may be chaotic operations and unpredictable performance.
Drawing on extensive case studies and 75 years of research, the authors outline four activities that can help companies handle greater complexity as they seek new avenues for growth.
Firms should:
- Hire specialists in functions such as sales, HR, marketing, R&D, and manufacturing. This lets them tackle work more efficiently and catalyses future growth by creating slack in the rest of the organisation.
- Add management structure. A few people at the top can’t effectively supervise everyone’s increasingly specialised daily work – and it’s hard for employees to stay focused and engaged without guidance and processes.
- Establish a framework of plans and goals. Otherwise, improvisation may amount to aimless riffing.
- Sustain the culture. Articulate the founding values in mission statements and job descriptions, and hire and reward for cultural fit.
- Between the extremes of ad hoc and prescriptive organising lies a useful middle ground – and leaders who can find it gain an important edge on their rivals.