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Be Prepared
In this week's editorial, Fiona comments reality TV shows about people making significant changes in their lives. In particular she is struck by the "extraordinary unpreparedness and naiveté" of those featured in the TV programme "Risking it all", which follows the experiences of people setting up their own businesses.
The one thing that never ceases to amaze me about this kind of programme is the casual attitude of many of the participants towards what are literally life-changing decisions and actions. Time after time, programmes show people setting off for a new life abroad without knowing anything about the country that is their destination. More often than not, they can’t speak the language, they’re planning to set up in a completely new line of business, and they have no idea what they’re going to live on until that business starts making money.
Suprise suprise ...... it all goes wrong!
It’s pretty much the same story even where people aren’t moving abroad to start their new venture. Again and again, programmes show couples, friends or individuals trying to set up a new business, without a business plan, proper financing, a realistic timescale or any sort of contingency plan. And surprise, surprise, it all goes wrong.
Of course TV producers want to make television that is fun to watch, and seeing someone mess things up in spectacular fashion is much more entertaining than following the progress of someone who never suffers a single hitch. But there’s clearly no shortage of prospective business owners who are prepared to jump right in without any proper planning and just hope for the best.
Well, it may make for good TV, but it’s not a sustainable business approach. I’ve seen programmes where people go way over budget before they even open the doors of their business, where they have no idea how much they should be selling and at what price in order to turn a profit, and where they’ve frittered money away on luxuries and extras while the business struggles to survive.
Follow the Cardinal Rules
A frighteningly high proportion of new businesses - around three-quarters - fail within the first 5 years and, with attitudes like this, that comes as no surprise. If you want to succeed in business, you have to follow a number of cardinal business rules. There are no exceptions and no short cuts. It’s that simple.
The most important rule of all is that you MUST have a business plan. You must know what you’re selling, who’s going to buy it, how much they’re going to pay for it and how you’re going to get it to them. You also need to know how long it’s going to take you to make a profit! The business plan is the tool to help you answer all these questions, and would-be entrepreneurs skimp on it at their peril.
I’ve had clients say to me that they haven’t done a business plan because it’s “too hard”. Well, if you find writing the plan difficult, that’s nothing to how hard you’re going to find running the actual business without any plans!
Of course there are a huge number of issues that anyone setting up in business will need to address that fall outside the practical scope of the business plan. You’ll need to make sure your attitude is right, that you have enough people to give you morale and emotional support when things get tough, and you’ll need to be absolutely passionate about whatever it is you want to do.
If this all sounds a bit daunting, it needn’t be. Our new course, Be Your Own Boss, takes you through everything you need to know to set up your own business without the risk of becoming one of the failure statistics. Back it up with some coaching and you’ll really get off to a flying start!
Good Luck!
