ADVOCATE COLUMN 2nd WEEK DECEMBER 2012

As some people are beginning to wind down for the holiday season and possibly some time away from business many we use this time -if they are fortunate enough not to have to work through the holidays- as a time for reflection. They will consider what they have achieved over the last 12 months and where they want to be in the future. Out of this reflection some may decide to embark on a new endeavour and possibly to follow some long-held desire to start their own business. International research has shown that failure rate among start-up business can be very high. One report I read recently suggested that only one in twelve start-ups succeed in the long term. People intending to start their own business should ensure that their decision is as well informed and objective as possible and that they have done everything prior to starting to ensure they have a high chance of success. There will be many reasons why someone wishes to start their own business yet whatever their motivation they will experience very similar challenges in doing so. They will need to critically examine the venture before investing too much time and money and ask themselves some serious questions. Putting aside questions such as where the money is going to come from or whether everyone involved in the business has a shared vision or whether they have the shared capability for the venture to succeed, the important question is what you are selling. There must be a reason why the market wants your product or service. That is, what is the value proposition for the customer is and where will the customers be found. It does not matter how fantastic you think something is, if others do not share your view or feel that the return they will receive for their investment is sufficient, then there will be no demand. Without clearly establishing these two points the start-up will struggle to identify the best business model to sell whatever it is they are selling and how they will create a demand for it. There will be risk involved and this in general will correlate with the potential rewards. There are many agencies to assist start-up businesses and those people who have done their planning in advance, established a value proposition and are prepared to listen and ask questions can reduce the risks considerably.