Entrepreneurially minded people always think of new ideas. Sometimes, they even take those ideas and turn them into businesses. Whether they falter or stay on the market to become household names often relies on a number of checkpoints to pass at the business planning stage.
Companies like the Canadian Youth Business Foundation (CYBF) help young entrepreneurs from the planning stage to the launch of their businesses through a program that includes mentorship and financing. Through assessing your business, understanding your plan, and providing professional advice, CYBF entrepreneurs-in-residence like Dominik Loncar help to make sure you're on the right track.
If your original idea didn't work out, maybe you set up shop on the wrong side of the city, or you realized you couldn't simultaneously manage your business and your undergrad studies. Mistakes happen and failure can always be learned from, if you've been in the business for two years or 20. Loncar helps us understand why businesses fall apart, how to move forward, and why failure might not be so bad after all.
Identify where it went wrong
If things with your business didn't go as planned, ask yourself what happened. Reevaluation can help ease you back into entrepreneurial opportunities in the future. Loncar suggests some reasons why your business may not have made it in the market.
Organization is key when it comes to running a business. Young entrepreneurs often try to take care of too many tasks at once and fail to cover their priorities. It's really wrapping your head around where you should devote your energies, says Loncar. Unfortunately many people don't know that; they get all this other advice so they're running around doing a bit of this and a bit of that and then they realize they were doing the wrong thing or not enough of the right things.
It's crucial to avoid leaving your potential customers out of the business planning stage, as they're the direct indicators of your success. I think the other challenge is they don't do enough market research, he says. They think they have a great idea and that it'll work and people will love it, but how did they make that assumption? Did they talk to their customers? Have they understood the market and how it works?
Every business idea shouldn't be kept a secret, says Loncar. Too many people are afraid to share their ideas, but an idea isn't a business. People need to realize without talking and sharing their ideas with others, it's difficult to get insight.
Lastly, Loncar says that business owners must understand the numbers game. They have to figure out their business model, so looking at how they are going to make money with this business. When starting out, they really need to look at the financial implications of their idea. That just means sitting down and doing the cash flow properly and really understanding numbers because without that, it's still an idea.
Know when to move on
A failed business can be discouraging, but it's important to move on. To do that, entrepreneurs must look at their situation and whether or not they're ready to take on another project.
Are they ready at this point in their life to start a business? That means the worst thing you want to do to run a business is have a big debt load, says Loncar, adding that it's a good time for entrepreneurs to figure out if relationships with their business partners are working, and weighing their other commitments like school or family. That's going to have an effect on how you run your business and you'll be stretched too thin.
Learn from failure
Humility is an important attitude to have when running a business, says Loncar. There's a saying in business: ÔÇÿfail often, cheap, and fast.' Making small mistakes are inevitable, but ensuring you take proper measurements to minimize costly errors can benefit your business in the long run.
You don't want to be failing recklessly, he says. It depends on what you mean of failure, but the way I'm looking at it is something you've attempted to do, it hasn't worked out, but you've gained lessons from it, adding that failure can often act as a driver to move forward.