There’s Only One Right Way to Start a Business

These steps reduce the risk of startup failure by 90%

Everyone has opinions, but not everyone has data.

This is never more true than when someone is trying to start a business – people will be coming out of the woodwork with unsolicited advice and irrelevant examples, no matter how well-intentioned they might be.  But this is NOT the time to give everyone’s opinion equal weight, especially if you’re a first time entrepreneur.  Because until you yourself have been through the startup process a few times it’s really, really hard to tell good advice from bad advice.

One thing is absolutely, inarguably true – there really is only one right way to start a business, and here it is: You have to learn absolutely everything you can about your prospective customers, and you have to make every decision about your business based on what they prefer.  That’s it.  That’s the secret.  Do this and you’ll reduce the risk of your startup failing by 90% or more.

What should your business name be? Which logo should you pick and what color should it be? What should your product lineup look like and how much should it cost?  How should you decorate your place of business?  Where should your place of business be located? These questions and a hundred more must be asked and answered before you take any other steps. Not answered by you – answered by the people who you want to be your customers once you’re up and running with your new business.

If you’re making decisions about your new business without accurately gathered and carefully analyzed customer input, you have a hobby, not a business.  If you’re making decisions based on what you like or what you want to do rather than what customers told you that they like and what they want you to do, you have a hobby, not a business. And this is the real reason why so many new businesses fail.

Nine out of ten new business failures happen because those businesses never really had any idea at all what the market wanted or what the market was willing to pay for. Studies conducted by the US Small Business Administration (SBA) and by researchers at business schools like Harvard, Stanford, Wharton, Darden, Babson, and Wolff, show that 90% of businesses that failed in their first two years of operation had deficiencies tied back to this specific problem, to this specific procedural oversight during the buildout and launch phase of their new business.

Nine out of ten business failures can be traced back to these early, easily avoidable mistakes. The ONLY right way to start a business is to learn everything you can about your prospective customers FIRST, and then base EVERY decision about the business on what THEY want, need, and prefer.  Do this, and you’ll reduce your odds of failure by 90%.