Starting a business is hard work. In fact, only a small percentage of new businesses succeed.
So what separates the success stories from those that failed? Howard Love, a life-long entrepreneur with more than 35 years of experience and author of “The Start-Up J Curve,” told Yahoo Finance’s Seana Smith in the video above that it’s important to anticipate headwinds and overcome obstacles. He says the best way to do this is by following six steps to ensure entrepreneurial success.
Create: “This is where you create your team, your product and hopefully raise some money,” said Love. It’s where you “identify an area that is going to be worthy of the entrepreneur investing their life’s energy, not to mention their savings.”
Release: Once the three key elements are in place from phase 1, the idea, the team and the money, it’s time for phase two. “This is when you get the product out there,” Love said. “Getting products out on time can be tricky and it rarely happens.” Love explains in his book that the most successful start-ups are the ones who listen the hardest and pay close attention to customer feedback after their products are released.
Morph: “The first product usually does not work. That’s been my experience in startups 80%-90% of the time. This is the OMG moment,” Love said. “So morph is when you take the little glimmer of hope you had in the product and create something new that was not in the original business plan.”
Model: “This is when you figure out how to make money,” Love said. “You do this by knowing and driving down all your costs, and at the same time maximizing your revenue.”
Scale: “This step is when you want to blow it up and get it out into the world,” Love said. “You assemble the people, processes and money necessary to take the company to the next level.”
Harvest: “Those are the good times,” Love said. As highlighted in the book, it’s when a company is transitioning from start-up to a fully established business and “time for entrepreneurs to reap what they’ve sown.”
But even if you do follow these steps, start-ups can still suffer setbacks. When this happens, Love says it’s important not to give up, and always remember to persevere.
“There’s always a play. There’s always something so take a deep breath, don’t panic. Talk with your team and figure it out,” he said. “There’s always a way out.”