Most people worry about the challenges they might face if they decided to start their own small business.
Here are some common risks in starting your own small business, along with some surprising conclusions about how to handle them:
However, what is important to recognize is that regardless of which outcome happens, any business will have a different set of risks which accompany each of these outcomes.
Thus, the best strategy is to plan for every possible outcome, so you are not surprised or disappointed by whatever the future may hold.
Copyright 2010, by Marc Mays
Here are some common risks in starting your own small business, along with some surprising conclusions about how to handle them:
- The new venture could fail This is probably the most obvious risk, but even if a new venture fails, is it really that big of a problem? Suppose that, in the process of winding down one business, you learn valuable insights which provide the key to starting a new, more profitable venture instead.
- The new venture could succeed The success of a new venture can pose problems all its own.
- The new venture could shift to a "zombie business model" In this case, you may have the worst of all possible worlds.
In that context, the so-called "failure" of the first business was simply a stepping stone to something greater.
After all, the most memorable successes for most people are not those which happened with no difficulty whatsoever; the victory which happens after numerous setbacks is generally far more gratifying, and memorable as well.
Consider the example of Henry Ford, who declared bankruptcy three times before building a lasting empire.
How many people would still think of him as a "repeat failure?" So even though failure is not permanent, neither is success.
When a new enterprise takes off, you may not have the skills needed to manage a rapidly growing business.
On the other hand, even if you do have the skills needed, you may prefer the challenge of launching new startups to the rigors of managing a larger business.
This forces you to make a choice: Do you turn the business over to someone who is better (or more willing) to manage the business successfully, so you can remain an entrepreneur? Do you keep running the business, but keep it as a "bonsai tree business model" (where growth is artificially constrained to the bare minimum)? There is no simple answer to these questions, yet these are relatively good problems to have.
A small business which is not alive and experiencing noteworthy growth, yet one which also is not dead as a result of obvious business failure.
Instead, a zombie business model lurches along for as long as you put in the time and efforts needed to sustain it, yet it never goes quite where you initially had hoped it would.
This possibility can never be entirely eliminated, but proper pre-startup planning can reduce the risks of it occurring to some extent.
If it has already occurred, then the next best option may be to convert the venture to a better business as soon as possible.
However, what is important to recognize is that regardless of which outcome happens, any business will have a different set of risks which accompany each of these outcomes.
Thus, the best strategy is to plan for every possible outcome, so you are not surprised or disappointed by whatever the future may hold.
Copyright 2010, by Marc Mays