© 2008 Vinny Ribas

 

In a perfect world, every piece of your business puzzle would fall into the right position as soon as you opened the box and dumped the pieces on the table. Your invention would work perfectly the first time you tested it. The first person you showed it to or told about it would immediately write you a $5,000,000 check and say, “Go for it!” Within a week, every appropriate retailer in the country would be calling you because they want to sell it for you. Within a month, your product is flying off the shelves because consumers just can’t get enough of it!

 

Unfortunately, it’s almost an unwritten law that it is going to take more time and more money than you expected to launch and grow your business. Over and over again, businesses fail because the unexpected stopped them in their tracks. Prices go up, demand slows down, competition moves in, key personnel quit, prototypes don’t work, the large customer you were counting on falls through etc. The list of things that can go wrong is endless.

 

Please don’t let this discourage you. There are things you can do to avoid being cut off at the knees by surprise events. Here are a few:

 

• Plan for the worse case scenario. Every aspect of your business should have safeguards and emergency plans in place. It’s no different than policemen and firefighters doing disaster training just in case there is a tornado or a flood. It may never happen, but you need to be prepared.
• Interview people who are experienced in your industry. Ask them about the bumps in the road that they had to navigate around, or the brick walls that they had to climb over to move their businesses forward. Bring one onto your executive team if possible. This will help you to prepare your company as much as possible. Don’t try to think of all of the “what ifs” by yourself. Some challenges will be industry specific.
• Stay on top of all trends. It is important to know what is happening in the world around you, not just in your industry. Many circumstances, such as a slow economy, can have ripple effects that touch all businesses.
• Start with adequate capital. Nothing can kill a business faster than not having enough money to weather the storms. Before you open your doors, it’s wise to set aside 18-24 months of operating capital, including your own salary. This allows you the freedom of taking up to 2 years to build the business properly, instead of scrambling for every penny 2-3 months into the business.
• Keep up with technology.  Be certain that you are providing the highest quality products or services in an acceptable amount of time. Never skimp on the technologies that will keep you competitive. If you do, your rivals might leave you in the dust.
• Study your competition. Your competition is studying you, watching your every move. They are trying to anticipate what you might do next to get or keep ahead of them. That is why it is vitally important that you know what you’re competition is doing, how they think and what their next move is. It is the only way you can avoid being caught by surprise.
• Measure your marketing. Never do any marketing in which you can’t measure its effectiveness. Not knowing what is and isn’t working will drain your marketing budget in very short order. Also, give your marketing efforts enough time to take hold.  Repetition is key in effective marketing. Remember that marketing that works for your competitors may not necessarily work for you, and vice versa.
• Study your customers. Survey our customers to find out why they do business with you and what might cause them to take their business elsewhere. Often, the things that we believe are attracting customers are only incidental, and the real reasons are completely different. When you know your customers’ likes, dislikes and habits, you can build marketing campaigns to emphasize those strengths before your competitors do. Also, be sure to have a customer retention program in place, such as a weekly email newsletter, that keeps your business in front of them on a constant basis.

 

Some precautionary measures may seem tedious, time-consuming or expensive. Some might also seem quite obvious. However, every precaution that you can take equips your company with the tools, knowledge and wisdom that will keep you afloat during the wildest storms. The better prepared you are, the better your chance of not only surviving but thriving during those rough times when your less-prepared competitors don’t.