Most startups fail, but do they have to?
A large amount of research has been conducted around the reasons for startups failing. Many of the studies actually produced conclusive results on the top reasons for small business failure. Most are in agreement that lack of cash, scaling too quickly, or poor team dynamics are some of the main reasons that businesses often don’t make it past year one.
After working with two dozen startups, I have seen both success and failure firsthand. Although the decline of a startup may happen for a number of reasons, almost all failures can be traced back to one place: poor preparation.
Without a clear grasp on goals, direction, and decision-making processes, businesses fail.
Over the past four years, I have compiled a list of 22 questions to ask before making the leap in order to promote clarity and help success.
What are you trying to accomplish?
Whether it’s to change the world, create your hours, or just make money, knowing what your personal end goal is a must before starting.
I have worked with several businesses that were consumed by how ‘good’ their idea was but soon became burned out because that idea was not built around a personal goal.
During my own personal mission to help startups not fail, I have found that the ideas that turn into profitable and sustainable businesses do so because the founder had the personal motivation to pursue something that mattered to him/her.
Why are you trying to accomplish it?
Creating a solid self-awareness of why you are wanting to accomplish this helps you stay focused and motivated when things inevitably get tough. Without the why behind the goal, accomplishing that goal becomes ambiguous and defeating.
When that goal is reached, you understand you have hit the mark, but I have seen founders soon get discouraged unless they know why that mark was worth reaching for in the first place.
What does success look like for this venture?
Creating clear and quantifiable goals gives you something to shoot for and creates a direction for your decision-making process.
How are you going to know when you’ve succeeded?
Being grateful for what you have accomplished only comes through recognizing your signs of success. Defining the things that point to how far you have come is key for properly appreciating your startup journey.
Why are these indicators of success so important to you?
This helps founders dig into their motivations for starting in the first place. Knowing what you are pursuing intensely helps in the pursuit.
Why will your business matter?
Not just to you but to your customer, employees, and partners. Knowing this becomes the foundation of company core values and mission statements. Having a collective mission creates team unity and buffers against later internal disputes.
What problem specifically are you solving?
If you are not solving a problem, you don’t have a business. Creating a clearly defined problem statement is vital to understanding what you do and what your customer wants.
Why are you choosing to solve this problem?
This may seem redundant but seriously, it’s that important.
What is your two-sentence mission statement?
Take what you know and smush it into a two-sentence mission statement. This proves a deep personal understanding of your business and helps promote clear communication.
Can an 8-year-old understand your two-sentence mission statement?
If not, it is not clear enough. Keep it simple. After hearing your mission statement an 8-year-old should be able to communicate back to you what problem you solve, how you solve it, and why it matters.
What three habits do you need to do every day in order to succeed?
This helps you understand what the day to day activities of your business will be like. If you hate doing those things every day, you may want to get into a new line of work.
Why are these specific habits going to lead toward success?
Think back to your vision of success to make sure that these three habits will directly contribute to success.
How are you going to ensure you do these things every day?
If these things are going to ensure success, make sure you have accountability in place to be able to make sure you actually do them.
What three habits do you have now that are going to be most detrimental to your success?
Starting a business requires sacrifice. Identify things and habits that you need to sacrifice in order to be successful in your venture.
How are you going to change those habits?
Find practical ways to make sure you will avoid the things and habits that will cause your venture harm.
What part of the business are you going to be best at?
Knowing your strengths will pay dividends as things get overwhelming. Stick to the things you are good at and enjoy, find creative solutions or people for the other things.
What part of your business are you going to be worst at?
Founders waste huge amounts of time ‘figuring out’ the things they are bad at. Do not fall into that trap. Recruit help for the things you can not do alone, it’s worth it.
What parts are you not going to be able to do at all?
Think critically about the aspects of the business you are never going to be able to do. Find help.
Do you have the people you need to do what you can not?
Reach out to your network to find the people that need to fill in the gaps that you can not. If you can’t find those people, starting is futile.
Is this really how you want to spend a significant amount of your time?
An idea is only as good as the effort that is contributed to it. If you are not willing to put in a significant amount of time, find something else that you are willing to contribute to.
What is the day to day going to look like for you?
I have personally seen founders face burnout and disappointment when their startup turns into nothing but a bunch of administration work.
Do you enjoy these day to day activities?
Think through the day to day to ensure you will enjoy the daily grind.