Across years of providing advice to small and medium businesses, most recently as a partner of BridgePoint Group, I have been privileged to provide advice to dozens of start-ups.
I love the enthusiasm and ingenuity of the men and women that are prepared to ‘risk it all’ and ‘have a go’. And I love the fact that start-ups can sometimes bend paradigms.
But I have seen more failures than successes and I have learned that despite what it might look like, even a business like Instagram complies with the ‘laws’ of business logic. Right product, right place, right time etc.
So, what advice would I give to you? Here are six simple messages that I think will serve you well.
- Begin with the end in mind
Why are you doing this? What is the end game? How do you define success?
You will need to make thousands of decisions every year. So, it helps to have a framework for making them. I reckon that knowing whether a particular decision takes you closer to or further away from your end game is not a bad framework to start with.
Clarity of purpose is essential.
- Get comfortable with the worst case scenario
Know that it might take longer than you thought. Know that it might not work as well as you thought. Know that it might not work at all. Know that you might fail and that you might lose it all. Know what that means for you and your family and be comfortable with it.
Now, use the fear of failure as a motivator and don’t let it happen ‘on your watch’.
- Mistrust assumptions
Develop a strong radar for detecting assumptions. If something seems obvious to you, it’s probably because you are making assumptions. Learn to mistrust assumptions unless and until they are verified.
One of the biggest assumptions is that people will actually buy our product. Maybe they will, maybe they won’t. Go ahead, test that assumption.
- Keep it real
For most of you, it will be about profit. And profit will come from hard work. Every so often, there is an apparent exception to the rule. But it is just that, an exception.
There are many great ideas. But the gap from a great idea to a real business is substantial. You probably won’t raise money off a valuation comparison to Instagram.
So, keep it real. Focus on that first dollar of revenue.
- Leave your ego at the door
Inevitably, it is you that makes the difference. The business is successful because of you. And equally, it fails because of you. Make no mistake, ego kills businesses.
Ego leads us to rely on assumptions and to take unreasonable risks. Ego leads us to believe that we can succeed where others have failed. Ego leads us to ignore good advice, to listen to those that tell us what we want to hear in preference to those that tell us what we need to hear. Ego tells us to focus on the wrong things. Ego leads us to ignore the truth.
Stay grounded. Set up feedback networks. Know what you are good at. Know where you need help. And learn to evaluate the advice you get because not all advice is good advice.
- Focus on the numbers
The truth is in the numbers. And there is no hiding from the fact that all of the good things we do and all of the bad things we do are reflected in the numbers.
So, learn to read and interpret the numbers. And know this – if you are not getting the results you want, you need to do something different. The numbers hold all the clues.
There you have it. Six simple messages that create a context for success. Best of luck.
Mitchell Turnbull is a Member of the Institute of Chartered Accountants in Australia. Mitchell has many years’ experience advising small and medium businesses in Australia, including start-ups and is a Partner and Director of BridgePoint Group. To contact Mitchell, go to www.bridgepointgroup.com.au/contact-us/