Can you imagine how to create a successful business? Many can. However the failure statistics are shocking. For example did you know that some statistics show over 80% of new businesses fail within their first five years of operation? So how can you avoid the business failure trap and create a successful business?
In this interview, Lisa Aalders shares with Ben Chai several home truths on why businesses fail and what they need to succeed.
Should their be a problem with playing and listening to the video, you will find a summary of Lisa’ starter business tips below the video. However we recommend you listen to Lisa as there are many more in-depth insights and learnings on than our notes provide.
A successful business provides value?
Value to others is essential yet many find difficult to understand. Lisa echoed Marja Katajisto’s philosophy of looking at where you can provide value to others.
When you start a business you need to know that your product or service provides some level of value to the people that you are selling to. Ask yourself, “what do I know how to do that people will pay me to do for them?”
Being overwhelmed is one large problem faced by budding entrepreneurs because they over-complicate things. They obsess about their business model, they over analyse market need, and they get trapped in “paralysis by analysis” and never start.
Keep things simple and adapt and change as you grow.
A successful business knows their figures
When people say “know your figures” they are talking about two different types of numbers; the first is your overall goal, the second is the technical numbers you need to understand if you’re in business.
An example of an overall goal may be “I want to make £2,000 per month and work 10 hours per week”. Another example might be “I want to build a business that has a net profit of £1,000,000 in 5 years”. You need to understand what your overall goal for starting the business is.
You may be attracted to setting up a lifestyle business i.e. one that pays for you to live the lifestyle that you want. You may want to build a business that provides employment for hard workers. You may even want to build a business that makes more money than any other business in the world. Each of these examples requires a different foundation, a different range of expertise, and a different strategy to complete.
At the technical level, you need to know how much everything costs and the return on investment for each of those costs. These are numbers like cost per customer acquisition, or the cost per lead, or the percentage of sales calls that end in a sale, the average amount for that sale.
Remember business is about making money. You need to know what you’re getting for your investment. For every £1 that I put into marketing, how much value am I getting in return? If I spend 100 hours of my time to make a £200 sale, is that worth it? How much do I need to spend in order to get 10 more clients?
Start with the big overall goal, and then work your way backwards.
A successful business has a team
You need to find people to help you. Successful people are rarely successful on their own. Look for people that have achieved what you want to achieve and ask them for help. Find mentors and coaches that will push you toward your end goal.
It’s essential to spend time with people that also own and run businesses. Business people understand the building business mechanics, how to deal with the emotional aspect of building a business and can guide you through this minefield.
Believe in your dream
Finally, you need to truly believe in your dream.
Running a business is hard work, the reason why most businesses fail is that the owner gives up. The passion for the business wasn’t strong enough to keep them going, no matter what happened to them.
Huge thanks to Lisa Aalders for sharing her business insights with us. If you found this interview helpful
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If you are starting your own financial freedom journey, enjoy the following articles from our library. These articles will provide you with further insights in how to achieve your dreams.
- Five attitudes that paralyse your success
- Five simple actions that provide a major life boost
- Why being busy is a waste of time
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