By Andrew Marder
Here’s the hard truth – most great ideas don’t turn into great businesses. My plan for a coffee mug with a built-in pedometer? Dead on arrival. And yet man buns are still popular – what a world.
According to the US Small Business Administration, about half of all businesses still fail within the first five years. It’s not for lack of good ideas or ability, either. Businesses usually fail because they’re poorly planned or executed.
If 2017 is the year for your business to spring into being, here are five tips that should help you live to celebrate your fifth anniversary.
Do your market research
It doesn’t matter how much your mother loves your product. It doesn’t matter that your roommate would totally buy it. If you want to see the fun side of five years, you’re going to have to sell to the general public.
Before you sink your savings or a massive bank loan into an idea, go out there and vet it.
Ideally, you’ll interview potential buyers to get some real insight into why they would or wouldn’t want the product, how much they would be willing to pay for it, and when they would expect to buy it. You want to know these people inside and out.
If you can’t manage the interviews, run $500 worth of Facebook ads for your nonexistent product. Send people over to a ‘coming soon’ website and see who clicks. You might be surprised to find that your app for single moms is actually more popular with married, empty nesters.
Let the market tell you if your idea has value.
1. Build your Minimum Viable Product (MVP)
Once you know you’re idea has legs, get it up and running as quickly as possible. Having a product that you can sell or giveaway means having more information about your customers and what they want.
Hack together whatever you can, take it to parties, let people break it, write down everything they do, then go home and make it better.
Businesses that make the perfect the enemy of the good don’t stick around long enough to see either. Make a good MVP, iterate on it, and keep working toward the best.
2. Use contractors when you’re getting started
Full-time employees come with plenty of benefits. They build a company culture, dedicate themselves to the success of the business, and can become founders and owners over time.
Hiring people is expensive, though, and full-time employees come with lots of extra costs – office space, food reimbursements, health care, retirement plans, massive house parties featuring the slightly overpriced stylings of DJ Smoldyface.
Contractors can help you get your MVP off the ground so that you can stabilize the business for long-term success. If they end up being incredible assets, you can hire them once you’ve got a revenue stream in place.
Keep costs in mind and run the tightest ship you possibly can.
3. Embrace free tech
No matter what kind of business you’re building, you’re going to need some business software. Accounting, collaboration, project management, and customer relationship management (CRM) solutions all come in excellent free flavors.
Keep your eye on minimizing costs at all times and hunt down the free solutions that fit your needs. Many of today’s systems offer free options for single users or small teams, then scaling up as your business grows.
You don’t get bonus points for going out of business with an awesome portfolio of business tech – you’re just a different kind of broke.
4. Find a support group
You’re quitting a job, switching careers, spending your savings, borrowing new cash, and just generally going out on a limb. Your Aunt Tilda is going to think you’ve lost the plot. Your colleagues are going to try to talk you out of it. It’s going to be difficult to keep a positive outlook on the world.
Find someone – or a group of someones, preferably – to act as a safety net. Find someone who’ll say, “I’m so proud of you” even when it looks like you’re failing. Find a fellow go-getter that will spur you on to new heights.
Being an entrepreneur can be terrifying and lonely, so have a network in place to keep you on the right path.
5. Make 2017 your year
So much is changing in the world that there’s ample space for new ideas, new products, and new services. 2017 can be the year that you put working for the man behind you.
Take that idea and run with it – after you’ve laid out a detailed running plan. If you keep your wits about you, plan for the worst, and hope for the best, you’ll be well positioned to start 2018 as a successful business owner.
Andrew Marder is a writer for Capterra. His background is in retail management, banking, and financial writing. When he’s not working, Andrew enjoys spending time with his son and playing board games of all stripes. You can follow him @CapterraAndrew.
