…if you hate failure and want to avoid an embarrassing one
People often launch out into the sea of the unknown because of the beautiful picture of success. Over 90% actually get faced with the stark reality of failure. Many people often play fancy and believe they will fall in the 10% that succeeded. And this makes their failure more catastrophic. I believe in preparing for all scenarios, especially that of failure. That is the way the chances of success is actually increased.
The information here is not to win you over in an argument, rather it is to guide the one who doesn’t want to fail. Listen, if it’s your first venture, and you don’t have enough resources, you will probably fail. But you can make your failure a springboard to your next venture, taking you closer to your big success.
Here are 5 elements that you should have before you go ahead to launch a startup. You can launch a startup without these 5, but if you fail and you don’t have these, it would be quite devastating.
1. A steady source of income that funds your lifestyle
If your livelihood is based on what your startup generates, things might go bad. It’s not just your livelihood will be threatened if you fail, it is that the fear of not losing your source of livelihood will keep you from making the best of decisions. Whether you acknowledge the fear or not, it will be there.
Don’t assume that you can drop the standard of your life. It is easier said than done. Having a steady source of income doesn’t mean having a job. It could be having investments that produce yields that fund your lifestyle. It could be a friend or spouse that has decided to fund your lifestyle while you pursue your dream.
2. A business asset
It could be a real estate property, not borrowed or leased but owned. A business asset is basically something you have that you can give up for liquid cash. Things will not go smoothly and will rarely follow your plan so you need a business asset that can make cash available anytime.
3. A corporate customer
The idea of selling to the general public is a weak model for startups. There are giant businesses that can actually outprice and outproduce you. Selling to the general public is often a ‘dead-on-arrival’ model. This is because even if you succeed, the bigger businesses will set their eyes on you and aim their resources towards stealing your market. And in many cases, they succeed.
This is why you ought to have a corporate customer before fully launching your startup. The general public customers will come but you need to depend on a few corporate customers that will make up for more than 70% of your sales estimation. Have 2 or 3 companies agree to buy from you. When you register your company, sign an agreement to that effect. Make it a 5-year agreement. Create an option to opt out of the agreement but make it an expensive one.
4. An experienced guide
You need to have someone on your team who is far ahead of you. The position might not be official, but it must be clear to you. There is nothing as painful as having someone tell you that they could have made your path easier after you have labored and suffered. Success is good, but if you have to suffer really terribly for it, then it is not reasonable.
You need the insight of someone who has gone ahead of you in the industry. Not just any elderly person, but a definite person experienced in the industry and still active in the industry.
5. A community of like-minded entrepreneurs
You need a community of people like you. Not just entrepreneurs but relevant people in thriving fields. You need those discussions and the connect. These will give you comfort, encouragement and keep you going when things get tough.
You need meetups and conversations that will boost your business presence among your peers.
Generally, there are no hard and fast rules to starting up a company. These are basic things not really to make success easier but it is to make failure nonfatal. I hope you’ve learnt something