Here’s how to survive and thrive by modifying the way you measure success and by learning from your mistakes.
More than 100,000 businesses started in the first half of 2014, but 80% of those weren’t expected to last five years. So how can you ensure you sit in that elusive 20%? By identifying why businesses fail you can prevent the same fate befalling your company.
In a SmartCompany webinar, two successful entrepreneurs – Gen George, the founder of online job network OneShift, and Martin Halphen, the founder of The Fruit Box – shared their cashflow planning strategies.
Don’t let fear hold back your ideas
“For us it’s always been about trying new things,” says George, whose online job network recently snapped up mature age jobs board Adage for an undisclosed sum. “We have approximately 35,000 businesses on our network that use us, so we’re constantly in communication asking them about what they’re doing to grow.”
The overwhelming impression is that most businesses fail to trial their new ideas, says George: “They’re scared of failure, what people might think of them or what the repercussions might be. The successful businesses are trialling new things in small spaces where they can monitor the effects. If the idea works they run with it, or if not, they keep trialling new things.”
George is adamant that you should celebrate failure as it can help you crack that code and get your business to the next level – however, it’s also a good idea to research the most common mistakes made by new businesses so that you can avoid falling at the first hurdle.
Support your ideas with good execution
Often there’s some disconnection between a good idea and what it takes to bring that idea to life. A lot of great ideas are conjured up, but people’s expectations are a lot higher than what is practical, says Halphen, whose fruit business delivers to a who’s who of Australia’s blue chip corporations.
“It’s common for businesses to grow too quickly, develop cashflow issues and come undone, so from experience, execution is just as important as your concept.”
Remain optimistic, but realistic
“If you have a disaster in your 20s when your commitments might be lower, you can recover from a failed business. But if you have a cash disaster in your 40s once your life is a bit more established, it’s much harder for you to be flexible,” says Halphen. “In an ideal word I’d like to say you shouldn’t be discouraged, but practically you might not have a choice to start another business.”
But at the same time, from every failure comes a wealth of experience regarding what to avoid next time, he says: “If you do look at sensational falls in business, you can see that they’re not getting the balance right. Later they learn what they didn’t get right the first time, start up again and ensure they’ve got their limitations covered.”
Maintain an open mind
Being closed-minded is dangerous as thoughts and strategy can become outdated very quickly. “Have a mindset where you’re prepared to make mistakes, but don’t make the same mistake twice,” says Halphen.
Implementing a flexible and nimble structure that can react and adapt its strategy quickly will enable new changes to develop with ease.