As an active member of business networking groups in Ireland for the last seventeen years I have seen both the networks* and the business owners who joined us, grow over time. New members who come along often fit into one of two categories:
- Established business owners who know exactly what they do and are clear about their aims.
- New entrepreneurs. People with new embryo businesses can be hugely enthusiastic as they set out on their new journey.
For those start-ups, taking the time to answer the question ‘What is my business for?’ can help set them on the path to personal success in business. A crucial aspect of being in business is figuring out what the business is designed to do, what it can deliver to the people who set it up in the first place and what value they will get out of it in the long term.
Sometimes those who start new businesses are accidental business people, they have been pushed to start a business through circumstance, rather than in pursuit of a burning desire to be an entrepreneur. We all come to this point in our life through the culmination of what has gone before. Perhaps they have an existing skill which they want to make available to customers and simply need a platform to do that.
It is great to see state agencies pulling in behind new entrepreneurs, helping them to focus on what they are trying to achieve. There are now plenty of supports available to help start-up owners build their business.
We, as network members, are in the privileged position of being able to see how a business grows over its first few years. This can be heartening, but there is a brutality to the numbers when it comes to how many new businesses survive the first few years. Of those that start a new business, by the end of the first year many of them will be what we might call ‘the walking wounded’, by year two half of the businesses will have ceased trading and by year three as many as 90% of those that started will be out of business. Sadly, this means that just 10% of start-ups make it past the third year. Quite often the ones who do are those who have a plan, and these are the ones who go on to run a successful business.
Having said that being a member of a networking group does give start-ups access to more experienced business owners who have ‘been there’. These people, who start-ups might not otherwise have access to, can help them avoid pitfalls in their early, and most vulnerable, days.
Not every business is going to be a Google or a Microsoft, they don’t need to be. Many businesses run extremely well and provide a comfortable lifestyle for their owners, by providing an excellent service to a small, yet solid, customer base.
There are different types of business which reflect what the owner needs and wants to get out of running their business:
- Lifestyle businesses are those that usually operate on a part-time business to fit around the owner’s life.
- Hobby businesses arise out of a particular interest in a hobby or craft and generally supplement other earnings. The business itself is a pastime rather than a relied upon source of income.
- Asset building businesses are created with the aim of producing a particular return.
Regardless of the type of business involved, it will demand a huge personal commitment to make it a success. When the investment is so big, there are some checks you can carry out to ensure that you’re on the right path. For example, developing a habit of asking questions of yourself & your business, can help determine whether you are getting the right things out of the business for you.
When you have navigated the economic storms and the time comes for you to hang up your hat, how will you get the value out of your business? In order to be able to extract the value from your business at the end of the day, you need to know what you want it to do for you at the very start. This is perhaps the biggest challenge faced by new entrepreneurs. It’s ok to begin with a short-term goal, as long as you are ready to set some longer term ones in the not too distant future.
Coming to a decision about how you will pass on your business takes time, planning and commitment. Why not start thinking about it today?
*Networks are a peer group of self-employed people and business owners who help each other grow their business by way of referral. One must be eager to help themselves by helping others. Networking works best when people are prepared to give of themselves, their experience and contacts, with the promise that over time one’s efforts will be returned. It is not a get quick rich scheme but is of great value to those who take part.