Being a business owner is one of the best ways to earn money while you sleep. It is how you can be your own boss, do something different, and really start to transform the future into something a little bit better. Starting a business is, unfortunately, very easy. It is so easy that many fail to conduct the proper preparation or consideration and end up failing. They fail because they don’t have a strong enough business plan or any clear idea of what they are doing, what they need, or even who their customers are.
These businesses fail fast, so fast that there is hardly any record of them at all.
51% of small businesses are less than 10 years old. 32% are less than five years old. In total, the average lifespan for a small business is just 8.5 years. Living longer will naturally increase the chances of building that small business and grow into a medium and then enterprise-sized company.
Overall, business lifespans have shrunk drastically. In the 1960s, for example, the average lifespan for a company was 32 years. In 2020 that same average is now 21.
There are many reasons for this. The first is that trends and needs change so drastically that businesses can quickly fail to keep up. Businesses are also more often bought out once they reach a certain level of success, ending them that way though not in failure. Some companies merge, others revamp.
Even startups that enjoy a lot of investor startup funding experienced a lot of failures. Only about half of startups make a profit in their first year, and most don’t survive for more than 3 to 5 years.
There is hope in that statistic, however, in that it includes both companies that go under and also ones that are bought out – and often for a very good price.
Regardless of what kind of business you want to operate and whether you want to stay local or go big, planning and preparation is key. It is how you can avoid falling in that key first year or two and how you can build a strong foundation that can weather storms and support your every business venture.
Start with Your Strengths
Regardless of what kind of business you are looking to start, always begin with your strengths. In some cases, this will be obvious. If you are an engineer, then using that experience is a must, regardless of what type of business model you are going for.
At the end of the day, your skills, your knowledge, and your strengths are how you stand out. If you worked as an engineer, then using that experience to either prop up your business or to center your business around, is a great way to get started.
When you think about starting a business, you want business administration and operations to be the unknown factors, not what your business will be centered around. Alternatively, you could be a business or operations expert and want to find a product or service to focus on. Regardless, you only want one area to be unknown and then will need to work to fill those knowledge gaps.
Not only will centering your business around your specialization help you stand out and appeal more to customers or other businesses, but it is also a great way to take advantage of your existing network.
Networking in a new industry is hard; leveraging your network to help get your new business off the ground is how you succeed. Not only can you hire great people off the bat because you know who you want, but you can also market and even get preorders or pre-hires before you launch.
How to Fill Those Knowledge Gaps
There are a few big knowledge gaps that you will need to fill. For most, it will be how to start a business and manage it. The good news is that there are many tools and resources out there to help you do just that, starting with an MBA degree.
Earn an MBA
The MBA was originally designed for engineers to take their specialist knowledge and skillset and finally prop it up with business and human administration skills. Though it is still one of the best options for engineers, and in fact, engineers do make up the bulk of students, you don’t need to be an engineer to earn an MBA.
MBAs are ideal if you want to work your way up into an executive-level position or if you want to start a large-scale business. You don’t need an MBA to open up a little mom-and-pop shop, but if you want to grow your business idea, operate multiple locations, and really start a legacy, an MBA may be the perfect fit.
Most MBAs allow you to customize your degree as well with a certification in either modern business practices, global leadership, healthcare management, operations management, or supply chain management (Levels I and II).
As it was initially designed for engineers, there are additional opportunities available to you if you come from that background. You can earn a master’s of engineering management or a masters of operations management with just a few extra courses on top of your MBA. This allows you to earn two useful degrees in around two years.
What to Check with Your MBA
There are a few characteristics that you will absolutely want your MBA to have. The first is the ability to take it remotely. Online degrees have come a very long way from their early years and are now interactive, engaging, and informative. More than that, they make it far easier to manage your career while they.
There is a caveat, however. Not every online degree is designed to be completed by working professionals. The tradeoff is that you can graduate faster while studying remotely from home, allowing you to save on maintenance costs and be there if you have a family you need to support or care for.
This is not the standard. You can find an MBA that is accredited and designed for working professionals. Typically these degrees take around 18 months, but you can take as much as six years from the start date to finish them, making them incredibly flexible and perfect for those at all stages of their career.
You also want a program whose goal is to help you reach your goals, starting with whether enrolling is the right move for your career. You’ll know this is an option if you can get in touch with an admissions advisor before you enroll and have them go over your goals and how well the degree you are looking at can help you.
They should either help you understand exactly what the degree in question can help you with and why it is a great fit, or alternatively guide you to a degree option better suited for you.
Don’t stop there. Go through the courses and course goals, and even get in touch with recent graduates to hear directly from them about what the degree offered and how it helped them with their career goals.
As MBAs are accredited, you can guarantee on a certain level of quality control, but don’t let that stop you from vetting your options. There are various specialist MBAs to consider as well, for example, as well as those double degrees you can earn in certain situations (for example, if you are a working engineer).
Start Planning When You Start Your Degree
One of the best things you can do for your business-to-be is to start planning and workshopping your business idea alongside your degree. You’ll learn a lot about managing and starting a business, and if you have a clear business idea to workshop with your faculty and peers, you will likely find you get a lot of very specific, very useful advice you can use once you graduate .
You don’t have to have a year or two-year-long planning period in order to start a successful business, but you do need to spend some time considering a few very important things.
What You Should Research
Your MBA will cover a lot, but it won’t cover everything. The good news is that it should offer the essential foundation to make better decisions for your company so that you can build a winning business idea and plan it accordingly.
Just a few of the things you will need to research and have answers to include:
1. What Type of Company?
There are many different types of companies, from sole trader to limited and so on, which each suiting different business models at different periods of time. There are pros and cons for all options, so you need to know what type suits your business overall. For most, a Limited company is a great choice as it gives you many tax benefits and legal protections. You don’t even need more shareholders, as the minimum is one (you).
2. Who are Your Competitors?
For the best results, don’t just research your big, successful competitors. If you can, try to find information about the ones that failed as well. You can often learn a lot more than failure than from success, especially during the first few years of operating your company while you are still finding your business legs.
3. Who Is Your Audience?
Part of defining your niche and succeeding as a company is identifying your target audience. At the widest scope, this will be consumers vs. businesses. You can have a hybrid model, but for simplicity’s sake, you will either be working with customers and clients or with businesses.
Of course, this is just the first phase. What type of businesses or customers, their values, budget, and needs are also important to know. After all, you need to be able to serve these customers well. That means pricing your services or products at a comfortable price point while also appealing to them by offering solutions or ideas that will win them over.
4. Pricing and Wages
Your price point needs to cover costs and wages – including your own. You will be working a full-time job, after all, and paying yourself a wage is a very important part of that. You cannot work for profits alone, especially as it takes time before you may even break even, much less see a profit.
5. Business Name and Branding
Your business name should stand out, be easy to remember, and ideally help customers quickly understand what your business is about. Many of the top brands, of course, don’t have business names that obviously spell out what their business is about, but in exchange, they are memorable and unique.
6. Marketing and PR
Finally, you need to consider marketing and public relations. You need to get your name out there, which means marketing and PR. Always work with your strengths and always start marketing before you launch. The good news is that this, like many other research considerations you need to make, are often covered in MBAs, so you will know how to launch your thriving enterprise after successfully planning and building it.