Are You Starting a Business or a Fire?

It's the big one

You've got a business idea and it's a zinger. Nothing is goiing to stop its rollercoaster success. You're going to show the world how easy it is. Well, it can be, if you’re already famous, wealthy, with a strong marketing team and a thousands of breathlessly waiting customers.

Otherwise, stop. Take a breath. Because in the real world, starting a business is nothing like this. There are hurdles, obstacles, rules, and regulations. Even the rich and famous have struggled and gone bankrupt.

Why new enterprises fail

The Office of National Statistics (ONS) suggests that 80 percent of new businesses in the UK fail within their first year and 42 percent within the first six months. A survey by CBInsights found that over 40% of businesses failed because there was no market need for their services or products. This suggests no prior research was done, or that findings were misunderstood or ignored. Other common reasons included:

• Ran out of cash.

• Didn’t have the right team running the business.

• Were outcompeted.

• Lacked a business model.

• Poor marketing.

• Ignored their customers.

Your Company Structure

In starting out, think about what company structure you're going to have. Will you be a sole trader, a company limited by guarantee, a company limited by shares, an unincorporated group, a social enterprise, or something else? If someone makes a mistake, does that fall under the company name? Or are the individuals that make up the company responsible for their own mess ups? Do you need insurance? Will you have to submit annual returns or pay corporation tax? Can you go out on the street to fundraise?

Knowing these details will save you plenty of stress and heartache. Once you’re aware of these things, look at the reasons why you’re setting up in business.

Why you're setting up

You’ve been made redundant. Why? Because the people running the company are a bunch of useless, incompetent, corrupt, and inefficient buffoons. The CEO should never have been appointed, or should never have set up a company, and is in over their heads. They’ve given their friends, relatives, lovers, and the people they just fancy all the top positions. You’re going to teach them about merit and professionalism by beating them at their own industry game.

You’ve been made redundant. Why? Because the people running the company are a bunch of useless, incompetent, corrupt, and inefficient buffoons.

Before you’re tempted to build a copycat company, check your contract. Does it restrict you from competing with your ex-employer? Are you building on ideas developed as a spin-off from work you did with them? If that's the case, be careful, or you could end up with your old company suing you for intellectual property theft.

Best Friend Enterprises

You're both passionate about the environment. You both love chocolate ice-cream. You’ve shared laughter, grief, and gossip. Now you have a great fashion idea: tops with velcro tear-off sleeves. In hot weather, you can go from long-sleeved to sleeveless. With all those things in common, you could definitely work together.

So, which one of you is good at running a business together? At profit and loss projections? Writing a business plan? Talking to people? You may get lucky, but usually, friendship tends to be about similar tastes in food or music. That’s not business compatibility. Make sure you know the difference.

Before you’re tempted to build a copycat company, check your contract.

Personal vindication

Your optician’s fees for contact lenses and glasses are exorbitant. You’ve got a better idea. It’s an app that delivers direct multi-spectral imaging vision, giving humans ten times the photoreceptors of a bug-eyed mantis shrimp. 70 percent of the people who answer your survey have vision problems. They’re interested.

Chances are 99 percent of them forgot all about you and your survey the minute they sat down to tea. If you’re lucky, some of them will send you links to whatever it is they’re angry about too. After a while, you realise that you are helping them. They’ve got a bank account and £50,000 in funding while you’re still collecting names. You’re no further down the road to starting anything, except now you’re tired, bitter, and exhausted.

You’ve got a better idea. It’s an app that delivers direct multi-spectral imaging vision, giving humans ten times the photoreceptors of a bug-eyed mantis shrimp.

Keeping up with the Joneses

A neighbour has set up a dance class in her back garden. It's doing well. The thing is, you're a much better dancer. Also, you're in better shape. Yet she’s pulling them in and making pretty good money. It’s quite the mystery. After all, you've got all the skills. Hip hop, ballet, tap. samba, bhangra. No one can stand next to you for the gwara gwara or Rosalina. You can limbo, backflip, moonwalk, crump. Your Running Man is the thing.

You discover your dance students don't know how to move. The reason they came out is because they want somebody who understands they can’t dance. They're not expecting to go viral on TikTok – not for great dance moves, anyway.

They may be watching you in awe. However, not one of them is trying to copy you. They can hear all their non-bendy joints muttering, “Go on try it, I dare you.” And if you're honest, are you teaching them anything? Or are you just trying to prove to your neighbour that you’re the better dancer? Because that's not business. That's jealousy.

Don't be surprised if your students fall off. Or fall. Or if the same faces that were in your class last week now appear in your competition’s. You know, the one taking people through gentle moves that build their confidence, their stamina, and ultimately, increase their confidence on the dance floor.

They can hear all their their non-bendy joints muttering, “Go on, try it – I dare you.”

Overnight Millionaire

We all know about the businesses that are going to make you $3000.00 a month after one training video. But how much is that training going to cost you? Never mind the flashing red pop-up on their site telling you there’s only five hours left to sign up for more training that’s been discounted from $1000 to just 25 cents.

Well, there's plenty of great training videos out there, but did you sign up for that or for the 'Earn $3k a month' clickbait?

First, check the reviews. Are they actually telling you about how much money they made? Or just about how useful the training was? Well, there are plenty of great training videos out there, but did you sign up for that or for the 'Earn $3k a month' clickbait? Think about what you really want from these kinds of enterprises. If it’s training, then do it. However, bear in mind it’ll be a hefty price, and haven’t you already got enough bills?

Golden goose

There's a woman down the road who feeds the birds every morning. You discovered she also makes the most amazing wall art with twigs, breadcrumbs, and a pinch of cinnamon. The thing is, she’s as daft as a brush. She doesn't even realise how good she is and how much money she could make. You’ve tried to copy her style, but it's just not happening. You don't have the attention span and the dedication, and let's be honest, the expertise. You're just not able to make it yourself.

But you have vision. You're thinking of trying to do a deal with her. Or even better, she can give you some of her work for a pittance. Or why not free? Clearly, she doesn't have a clue about pricing.

You discovered she also makes the most amazing wall art with twigs, breadcrumbs, and a pinch of cinnamon.

Unfortunately, with this kind of initiative, you’re always going to be on rocky road. Your golden goose could find someone else, sell their entire stock, or decide they’re leaving the country. In the middle of, all your promotion, marketing, and investment, you have no stocks and nothing in storage. This is not the way to start a business. You will look like a talentless exploitive hack. Develop your own ideas and focus on them.

Superiority complex

If they can do it, you certainly can. After all, you know what they're capable of. Not much. They don't belong to the group that succeeds. They’re not the right age, nationality, culture, or social income. They walk with a limp. They stutter. They’re too short. Like way too short. Someone must be helping them all the way, holding their hand. There is no way that you can't do what they are doing. In fact, you are going to show the world.

The only thing you’re going to show anyone (other than that you’re a narcissist) is that your ‘rival’ is out of your league. You don't know what they've been doing. You don't know their networks, or their experiences in life. You don’t know their skills, their struggles, or their achievements. Never assume. There’s a reason why superheroes have alter egos.

There is no way that you can't do what they are doing.

Inferiority complex

If you have an inferiority complex, then the inverse is also true. You feel as if you’re constantly playing catch up. You haven't a clue about the sacrifices others have made to build their multi-million-pound empire. You just want to live like them.

To achieve this, you make reckless investments so you can have that same lifestyle, and so you can seem successful and rich. The problem is you're not. You’re on a luxury holiday three times a year and in debt up to your eyeballs. The pressure of being in dept while putting on a façade can lead to some seriously twisted mental processes that can end in tragedy.

You’re on a luxury holiday three times a year and in debt up to your eyeballs.

Build your own route to success

First steps to success will mean taking a long hard look at what you can do, what you are good at, and what you enjoy doing. Those are the basics for building a successful business. It's something you love doing enough that you'd do it even if you weren't paid. Which is useful, because there will be days when you won't be.

Instead of looking at the people you hate, envy, or despise, take note of the people you like and admire. Not at their fancy cars or their fancy clothes, but behind the scenes real grind of what they do. Once you have a clearer understanding of how they work, you'll be able to develop your own inspirational and realistic plan for success.

Good luck!