Small business startups are often built on an entrepreneur’s dream. Fueled by an inner drive, passion and love for what they do, entrepreneurs often go out on a limb to bring their ideas to life.
But that isn’t enough.
Studies show that 50% of small business startups will fail within the first year. And the number increases to 90% before they hit their fifth year. Starting a business is no easy feat. Sustaining it is even trickier. That’s why a little bit of planning (a lot actually), a ton of hard work, a supportive network of like-minded positive people goes a long way to surviving your first few years in business.
Gen Y founder Katya Baxter shares some important lessons learnt in her first year in business.
My latest business was three years in the planning, or rather that is how long it took me to take the plunge and sign a retail lease. Scary stuff these leases!
I absorbed any piece of relevant information that I came across in those three years like a sponge. So when I projected the cash-flow, I wasn’t making it up. I was using proven figures from other successful businesses that we had monitored. I was confident!
Much to my surprise, the figures we were achieving were so far from what we had projected that I think I would have been better off making them up. The main issue was that we were looking at the performance of established, older businesses. With a start-up, especially in retail, you cannot expect the same sale performance as an established business with a loyal customer base.
So I learnt that while research is important, it’s not just about the numbers. So many factors are at play.
It’s so easy to get caught up in a new idea and find evidence to project financial bliss, but it’s amazing how quickly incorrect projections can turn your dream into a nightmare.
Lesson: Plan for everything – the perfect world projections and the worst case scenario. These are the figures you should set your budgets with because then you won’t be disappointed!
In my world collaboration is king! It opens up new doors, creates new leads, brings new and exciting people into your life, and just gets the creative juices going. In the fashion industry especially, creatives continuously work together on projects that bring value to all involved. You often see creative collaboration at the corporate level too and it is a wonderful source of low cost marketing.
Networking is the first step in finding collaborators. Having a genuine interest in people and what they do is what facilitates discussion which then leads to ideas for collaborative projects. The obvious difference between a collaboration and hiring someone for your creative project is cost.
In terms of outcomes though, a collaboration can lead to something that you may have never come up with yourself!
Hired services generally work to your brief which has some limitations as you don’t know what you don’t know. The reality with collaborations is that sometimes they don’t quite turn out as you envisioned but that can be a good thing.
Lesson: If you are marketing on a shoe-string, collaborate!
Check out our recent collaborations with film maker Hinny Tran, and fashion stylist Sinead Hargreaves to create a Gatsby fashion inspired styling tips video.
I noted that most successful entrepreneurs talk about the importance of mentors or coaches for their lives or businesses. The idea made me curious but I didn’t know how to go about it.
Thankfully someone recommended a business coach to me just before the first birthday of my latest business when I wasn’t seeing the light at the end of the tunnel of endless hard work. I met with Ross the business coach for an initial session and got valuable feedback and advice that made me see the value immediately.
For the next six months in our coaching sessions we reviewed the business from the vision down. We improved our sales tools, time management, outlook, and most importantly mind-set! I am often amazed at just how much the mind-set influences the current situation in our lives. My business has definitely improved since we started working with Ross, and I attribute it to the improvement of my mind-set.
The great thing about Ross is that he is also a life coach. Combining insights into human nature with practical business tools is something that has worked well for me. I compare the experience to employing a personal trainer. They whip you into shape by forcing you to do things you wouldn’t normally have the motivation to do. They also review your diet and make helpful suggestions on things you can do daily to get into shape. A business coach is the same, whipping you and your business into shape.
It’s also nice to have someone to go to review actions and decisions you are not sure about. It’s like having a sounding board to give you tools to answer your own questions. What is amusing is my fiancé often gets frustrated that I act upon Ross’ suggestions which may be similar to what he has been saying. But going back to my personal trainer analogy, if my fiancé said “You’re eating too many carbs, hence the tyre on your waist, get off your butt and do an hour on the treadmill, 40 squats and a body combat class!”….It would go down like a lead balloon as you can imagine! However, if my personal trainer said that, I would do it!
There is definitely something about making an effort to get the most out of something that you pay for, rather than something you get for free.
Lesson: Unless you are blessed with superior self-motivation, business knowledge and a permanently positive mind-set, I would definitely recommend trying a business coach. It’s really important to find the right person though. Some people can rub you the wrong way and in that case you just can’t work with them. If it doesn’t feel right, try someone else.
If you are Melbourne based and would like to give it a go, check out Red Hot Pepper.