Lead, Follow or Get Out Of The Way, Part One of Two
There are many reasons why some new enterprises thrive while others suffocate in the first couple of years. Of course, there are the often-cited, concrete reasons for failure such as poor capitalization, higher then anticipated development or production costs or, in the case of independent contractors, lack of reliable support staff.
However, there five less tangible elements that can capsize your business ship in a hurry. Interestingly, they all focus on YOU.
#1. Have YOU done your due diligence?
By this I’m talking about solid market research. If you haven’t the funds to hire professional research specialist(s), then do your research at a grass roots level by obtaining frames of references and basic market information. Questions that you need to answer include:
- Are similar enterprises in my markets doing well?
- Is this an established or mature market?
- Are there competitors? If so, is there room for more competition? Is there room for my enterprise to grow?
- Can you compete with the market leaders?
- If there are no competitors, why? Is there a reason that no other enterprise is in this market?
#2. Advantage: You?
When you’re doing your due diligence on the competition in your markets, also ascertain if your enterprise will have any specific advantage(s), by asking the following questions:
- Does your product or service have a specific advantage over the competition?
- If so, what is the perceived value (of those in the market) about your advantage?
- Is there anything truly new or unique about the core idea of your enterprise?
- If you are selling your services, is there something special or extraordinary about you, your skill set, or your personality?
#3. Have YOU honestly considered inherent disadvantages?
While you are assessing the advantages of your enterprise, you will also need to think about its disadvantages. This is just as essential in assessing the potential success/failure of your enterprise. Factors to consider include:
- Is there so much competition in your chosen markets that it reduces the earning opportunity?
- Is the market so crowded that trying to stand out or be recognized will be a costly effort with little chance of return on investment?
- Is the competition too strong? Will your business be up against major players, with deep pockets that control a sizable portion of the market?
- Are you launching an original product/service or a variation of an existing offering that requires client/consumer education?
- Are there competitive disadvantages in the products/services you’re offering?
- Is there a price disadvantage or perceived lack of value for your product or service?
Part of the picture with several of these considerations is the money factor. If you are competing in a crowded marketplace, or a market that is dominated by some big players or a virgin market, it is likely that you will need to be well capitalized.
#4. Are YOU and YOUR Skills, Attitudes & Personality a Threat To Your Business?
As a newcomer to your chosen market, an enterprise that lacks unique features, has uncompetitive pricing, or delivers poor quality is not likely to survive. One of the hardest elements to isolate in assessing the potential success of a start up or young enterprise is the Founder Factor. That is: You may have founded the enterprise but are you truly the right person to be running it?
Consider the following examples: • Are you a skilled and experienced manager? Would your enterprise be better off with someone who can manage operations and people?
• If you’re going to be responsible for sales on an ongoing basis, such as is the case in solo enterprises, do you have the temperament, speaking abilities, confidence and tenacity to handle this vital task?
• If you’re not a good money manager with your personal finances, it’s likely that you’ll be the same with your business. Acknowledge this limitation at the outset and hire a financial officer. If you’re business lacks the funding or is too small for a full time financial officer, retain an accountant.
#5. Lead, Follow or Get Out Of The Way
This phrase from an old Chrysler/Dodge ad, and spoken by famed CEO Lee Iacocca, has become a popular catch-all for many things. I find it truly resonates for those of us who are starting, have started or are running our own enterprises.
The idea, design, vision, etc. may have come from us, but are we the best ones to grow it? The answers to this vary with the individual entrepreneur.
If launching your business into the stratosphere of earnings and market dominance, then you should consider those that can get you there.
However, if you’re in a small enterprise and your driving goal is to provide a service or product that represents YOU, then you’re going to want to retain control.
More on this in Part Two of Lead, Follow or Get Out Of The Way, posting on October 10, 2018.