April 2nd, 2025
New businesses start every moment of the day. Whether they survive or not to tell the tale is another story. According to the Commerce Institute 20% of businesses fail in their first year after opening, 49% fail in their first 5 years, and 65% fail in their first 10 years. This can happen for a lot of reasons: Poor planning, no budget, incomplete market research — the list can go on. So the first thing you need to ask yourself is why will I survive? What problem am I solving for people? It could be as simple as offering a new variety of a food all the way to an improved technology. Make sure you have a reason for why you are starting the business and that the market has a space for you to thrive in.
Chances are there will already be established businesses that you will have to compete with upon starting. So how can win over their clients and prove that you are the better option? Nine out of ten times, it's not going to be the quality of the product but the price you can offer. How can you schedule your pricing to win over customers? If you are going to be super competitive in your pricing then how much of the profit margin are you willing to give up to win? The classic offer we always see is "First two months is free and then you start to pay." If you can get the customer in the door and prove to them you are the best option, then surely they will have no problem sticking with you. Figure out how you are going to sell your product or service and what each sale will net in profit. Think about whether you are going to be a high-volume business making many sales annually with smaller profit margins or low-volume but higher profit margins.
We've established the problem you will be solving for your customers/clientele, but great products might not make it out alive because they weren't pushed to the right market. Maybe they went too broad in their marketing instead of finding a smaller niche where they can thrive. It's important to know who exactly you will be selling this product or service to and that they understand the need for it and the usecase. If it's a pizza shop—is it cheap quick pizza for the cheap-quick-fix customer or is it artisanal pizza that will be sold mostly to "foodies". If you are starting a clothing company are you selling fast-fashion to the spontaneous online shopper, luxury high-end clothing, or streetwear? Each category will have a specific buyer in mind.
How you will reach your now declared target market is the next question to ask yourself. Design is a great way to visually attract the right customers. Understanding the market and what they like visually and then creating a campaign in that vain is a great way to start to attract new customers.
social media campaign
paid advertising
creative marketing campaign
referral incentives
exclusive deals
If you run out of money it's game over. Putting together a budget, projected sales, and profit margins is crucial to success. Plenty of great companies with amazing products don't make it because they get too aggressive with their spending or mis-allocate their capital towards unnecessary expenditures. Figure out how much money you need for materials and making the product or starting the service and then how much you will net in profit per sale. How many sales do you need to get annually to break even? Start there - because 95% of business don't see a profit in their first year. You will be losing money getting your product out there before you can finally see a profit. So be prepared and figure out your budget.
Who are the main competitors you want to steal customers from? What are the products/services available that you will be competing with? What will it take to have one of their customers turn towards you rather than sticking with them? How can you win over these new customers and show that you are the better of the two options? Identify your competitors strengths and weaknesses. This will not only help you better understand who you are marketing yourself to but also the identity you want to create around your business to allow you to do so.
The unsung hero of every business is their design. Design is everywhere and yet we often times forget to think about it because we are so wrapped up in the product or service itself that we will be offering. Branding your company early on is one of the best investments you can make. You are going to have to make marketing materials to help you promote your business. By establishing brand guidelines you place yourself ahead of the curve. You will then have your logo, typography, color schemes, mission statement, and personality/tone of voice laid out so whenever you are creating a new asset for your business you don't have to make those decisions. Establishing your brand identity early on will relieve the stress and confusion in decision making later on down the line.
Problems will come and go and there is nothing you can do about it. What you can do is educate yourself about the difficulties most businesses face, and how they solved those issues. Joining a referral network is a great place to start for getting support. Making sure you have a support system in place be it family or friends is huge when starting a new business. Failures are inevitable - we take them and learn from them. Having the support to absorb those failures though and push on is everything.
Everyone loves a good story. You say otherwise and you are lying. It's important to identify the story behind your new business and its conception. People have a much easier time feeling connected to a business when there is a story involved. It evokes emotions which are at the core of all of our decisions.
Yes, you don't want to get too far ahead of yourself. You don't want to be putting too much effort into the future and how you will take over the world when you haven't even started yet. But it's still important to start to think about these things now so if and when the time comes you will be more prepared to scale accordingly. In the beginning it's all about staying alive and getting to the profit zone. But if you do manage to enter that zone, then you definitely want to have an idea of where you will take the business to continue it's growth. When momentum comes you have to harness and take advantage. If the market is demanding growth and you aren't ready for it, you will have missed an exceptional opportunity—and that's the last thing we want.
I've watched plenty of businesses come and go. Being prepared is going to be 90% of the battle because it's not just financial capital you need to be thinking about, it's also emotional capital. Startups are stressful and require a lot of time and dedication, but by educating yourself early on and thinking about what it will take to stay alive will give you the leverage to stay alive long enough to see success.