Anybody starting out in business knows that thorough research is needed when drawing up a business plan. The business starts off with an idea, and the plan is designed to map out the route from its starting point to where the owner expects the new start-up to be in a period of time, say three or five years.
An idea that sounds simple in theory can be anything but in practice. Drawing up a business plan is a huge step. If anything is wrong with the plan, then the whole venture gets off on the wrong footing.
Ensure the basics of your business plan are correct
Thorough research is required to make a solid business plan and help your business find success. But it’s amazing just how many new start-ups look like they fail to plan properly. Even the DeLorean – which gained notoriety through its cinematic debut – and Google Glass – there’s no questioning their success in other ventures – fell short in their planning.
According to research by CB Insights, in Canada 35% of businesses fail because there’s no market need for their product or service. That sounds like a basic fundamental oversight. Enough unforeseen pitfalls can affect a new business start-up as it is. So to have not even done enough research to find out there’s no market for a product or service seems amateurish. There can be little surprise when that business hits the wall.
Different industries are affected in different ways. Some are affected by demographics or changes in societal habits. These sorts of eventualities are hard to predict when drawing up a business plan – as it’s difficult to foresee consumer behaviour and habits in an ever-changing online world. But depending on the nature of the business, some upheaval – both locally and globally – can be foreseen.
In the modern-day world, industry news is readily available online to help when curating a thorough business plan. Using industry news along with an economic calendar provides early insight into seismic shifts that may affect your respective industry. Such resources enable people to access short-term business forecasts and gain insight into the planning stages. This is especially helpful if a business is going to be affected by global market trends.
Don’t be put off by failed businesses
View the negative talk around failed business start-ups with an open mind. The statistics are scary, but when you dig a bit deeper, there’s a trend.
Go back to the statistic showing 42% of Canadian businesses fail because there is no marketplace. That’s basic stuff. Other reasons given are that 29% run out of cash, 23% didn’t have the correct team running the business, and 14% had poor marketing. Those reasons are all seemingly related to poor planning.
Yes, be cautious and wary of the high failure rate. But also be aware that a lot of those businesses that failed were more than likely poorly planned, and had failed before they had even started. There’s something you can do differently and that’s planning.