Updated: Mar 18, 2021
About 50% of startup businesses fail by their 5th year, and the rate goes up as businesses age. Though the statistics are shocking, that doesn’t mean business failure is inevitable or that you should fear it.
As you begin your business journey, the most pressing question you have is probably “How can I stop my business from failing?” While there are many things you can do to protect from failure, it’s also important to reframe your thinking.
Instead of always living in fear of failure, consider how it can help further shape your business goals. Find out how you can protect from failure and adapt to it. Start living and operating within the realm of confidence over fear!
Do Your Due Diligence and Research
If you’re starting a business, you probably already know this, but success doesn’t come easy. Beyond a regular job, there’s more research, prep work and general educating yourself that you’ll need to put into it.
The first step to preventing failure is putting in the proper amount of business prep work. The more work you put into your business upfront, the less likely you’ll face something unexpected.
Startup research should include everything from market analysis to personal development. Find out as much as you an about your industry, competitive landscape and target customers.
Part of your due diligence should also include developing accurate projections. If you’re seeking investment, investors will use your projections to determine whether or not they move forward with your plan. Extra funding can offer the cushion you need to keep your business moving.
Develop a Strong Business or Marketing Plan
As a new business owner, you may have heard how important it is to create a business plan. The funny thing is, there’s no template for business success. Creating a business plan might help, but it could be a waste of energy depending on your needs.
Before spending time on a business plan, consider your goals. If you’re seeking funding, investors will need to see a strong business plan. The plan should include all of the research you’ve conducted as well as your revenue projections.
On the other hand, a marketing plan could provide more focus for your business. This type of plan will help you better manage your resources. A marketing plan will also help you reach new customers and develop a strong brand for business longevity.
Work With Mentors and Partners
In business, no one can do it alone. You’ll always need help, whether it’s in the form of a business coach, a business partner or strong, reliable employees. Building a network is a great way to prevent business failure because it offers support and guidance.
Know That Plans Fail All the Time
Despite all of your research and planning, your business could still fail. Knowing this is the first step toward adapting to failure and transforming it to your advantage.
You could have the best plan that many of your peers signed off on, but unforeseen circumstances can always throw a wrench in it. Know that there are plenty of things in business out of our control, such as changes in investment and industry shifts.
Learning from Failure
When you’re facing a failing business, the best thing you can do is learn. Understand what worked and what didn’t, and make a new plan from there. If you stopped every time you hit failure, the truth is there wouldn’t any time left to do anything else.