Growing a business is not as easy as starting one. Recent data from the Bureau of Labor Statistics show that roughly 50% of establishments fail to survive in their first four years.
The actual number counts more than 100,000 of privately held businesses. We decided to challenge ourselves by answering the question, “What does the journey of a business owner look like?” What is the path of business which both aspiring and emerging entrepreneurs must know to avoid getting lost in the field?
The Path of Business infographic presents the different challenges and areas of focus for every stage in the journey. Ideas, cautions, and input from experts are also available.
The beginning of the journey starts with a conception of an idea. This is the stage when aspiring entrepreneurs make the decision to turn their dreams into a reality. They spend a lot of time narrowing down the concept for their business.
The goal is to design a well-targeted blueprint that will attract the right clientele. They ask themselves the important question, “Is there a need for my product/service”?.
Five core dimensions to consider:
- Customers – Who are they and what do they need?
- Product or service – What need will it fill and how is it going to look like and function?
- Team – Is the business something that can be done solo or does it require the help of other skilled individuals?
- Financials – What is the best way to fund the business and make sure that it has all the necessities?
- Business model – How should the business operate to become profitable? Any legal steps to take in the process?
According to the Startup Genome Report, these dimensions move interdependently. They indicate how fast or slow the business will run towards growth.
Ideas may come from friends, family, colleagues, and gurus — they are everywhere. It is so important to make sure that once a decision is made, to remain focused.
Too many entrepreneurs experience ‘ESS’ – entrepreneurial squirrel syndrome. Regardless of their level of intent, distraction often swoops in and sidetracks the best of intentions.
There are many programs entrepreneurs can implement to remain focused, but it’s up to each person to find something that works best for them. Is it reading the 12-week year by Brian Moran or learning more about Deep Work from Cal Newport?
Whatever it is that helps your focus, do that and do it consistently. Books, like the two mentioned above, are great ways to generate new ideas.
Now that a concept has been identified, it is time for them to put them to action. The preparations have been made and the game is on!
It is the stage when ideas are validated. Questions like “Are the ideas working?” and “Is the business generating money?” appear.
Resources are utilized to acquire clients and to maintain the production of goods (or services) and income.
How long will it take to succeed? “It takes at least 4 years just to get pointed toward a real business,” says Startups.co Founder Wil Schroter.
He adds, “and I’d argue it takes 7-10 years to make your startup truly the success that you had in mind when that idea came to you.”
There is no shortcut. Neither is there an overnight success. Instead, there are implementation, adjustments, and tons of effort in the development of a business.
Entrepreneurs at the onset of this stage experience the pains of meeting the increased demand. People have acknowledged their presence in the field and are now desiring to purchase their product.
This rise in production summons the need to:
- Hire and manage additional workers
- Ensure all systems are equipped to supply
- Improve the quality of client experience
Unfortunately, not all businesses make it. 90% of Internet startups fail, due primarily to self-destruction.
Many of them struggle through premature scaling. They go ahead of their actual stages and step bigger than necessary.
Entrepreneurs who make it to this stage in their journey are great champions. They have stamped their brands in the industry and have acquired loyal clients — but not without blood, sweat and tears.
The path does not end here, however. New businesses, opportunities and trends continue to emerge and challenge the veteran entrepreneurs.
Their long-awaited victory may end sooner than expected. A case in point is the pioneering social networking website called Friendster.
Before Facebook ever came to be, there was Friendster.
According to author Mike Fisher, “Friendster had a very specific vision for how its product should be used, and it squashed any attempts by users to deploy it differently.”
Facebook saw the opportunity in the limited user control. That was how they beat Friendster and became a giant in the social networking industry.
At this stage, entrepreneurs open their businesses to more growth opportunities. They reach out to more people by finding new markets that align with their brand.
They also look for new channels where they may distribute their products or services. Partnerships outside of their locality are sought for these reasons.
The goal is to acquire a larger market share that will solidify their brands in areas where expansion is possible.
They have made it. Entrepreneurs who have reached this point in their journey have achieved a high level of performance since they started.
Their names echo in multiple locations and niche categories. But changes in the economic, social, and market conditions caught them unprepared for a downhill shift in their finances.
Support from their clients and fund sources are most important to help them stay longer in the game.
Entrepreneurs at this stage face two options: to see their business go bankrupt or to have an exit strategy. They come to realize that they cannot hold onto their businesses forever.
New business ventures may come in the horizon as well as opportunities for them to advance their careers.
At this stage, the real value of their businesses are determined and plans for proper transition are set in place.
Lack of Direction, Poor Performance
There are different reasons why a startup fails. Not all businesses thrive in the same environment. Not all are created the same.
But out of the 20 prevailing reasons for startup failure, many of them point to the glaring signs of self-destruction.
Many entrepreneurs move blindly along the journey despite their eagerness to face the risks associated with building a business. They struggle to scale efficiently, behaving either behind or ahead of their actual stages.
We hope that by identifying the seven major turning points in the path of business, aspiring and emerging entrepreneurs become more confident and equipped to stay in the course.
Let us know what you think about The Path of Business: Journey of a Business Owner. Feel free to leave comments and suggestions below!