The best start-up business advice might not be found in books or classrooms, as theories and plans are often put to the test in start-up scenarios their authors never imagined. The good news is that you don't have to experience every challenge in order to learn from it.
Just follow these three pieces of advice that entrepreneurs wish someone had offered them in the early days of their businesses:
1. Challenge Your Marketing Plan
As noted by a CB Insights report on the top 20 reasons start-ups fail, the single most-cited reason for failure is inadequate demand. In other words, after many businesses launch, the target audiences simply shrug their shoulders and walk away.
If you can't prove that there's a strong market for your business or come up with a compelling reason why your target markets should buy from you instead of competitors, it's going to be difficult to gain market share. In fact, five of the 20 reasons on the list are marketing related: product demand, ineffective marketing tactics, poor market timing, inability to compete and bad business location.
Challenge every aspect of your marketing plan before starting your business. Poke holes in it. Prove your assumptions. Get feedback from other entrepreneurs and marketing experts. Use data to establish that adequate demand truly exists, and define your company's unique selling proposition so you know how you'll take market share from competitors. Start a waiting list or take advance orders to put your marketing plan to the test before you even open your doors.
2. Scrimp, Save and Shore Up Investors
The same entrepreneurs who overestimate demand are likely to underestimate costs. Running out of money was the second most-cited reason for start-up failure in the CB Insights study. Writing on Success.com, Anne York, associate professor of entrepreneurship and strategy and director of the Bioscience Entrepreneurship Program at Creighton University, says that many entrepreneurs simply don't understand money, which quickly leads to cash flow management problems.
Your start-up business plan needs to include a realistic budget that details how you plan to generate revenues adequate for meeting expenses, repaying investors or lenders, replenishing inventory, investing in marketing and building for the future.
3. If You Manage Well, Your Team Will Help You Succeed
You might think of start-up business owners as "lone wolves" who go it alone. In reality, every aspect of business life requires you to understand and relate to specific audiences, from your company's vendors, suppliers, staff and customers, to local community leaders and the public at large. Ignoring any of these audiences can lead to problems.
In the early days of a start-up when you're totally focused on the tasks of running your business, you might be stretched so thin that you miss signs of dissatisfaction. Allocate time to monitor and manage public, customer, staff, vendor and investor relations so that you can discover and address any small problems before they become major challenges.
The real life of a start-up business owner could be dramatically different from what you had originally envisioned, but the real-life start-up business advice offered by other entrepreneurs can help. Use their advice to better-prepare your business for launch and look for warning signs of trouble on the horizon.