In many ways, a lot of new entrepreneurs take the same approach to business startups that they would take in a casino. Many just assume that the inherent risk associated with starting a new company makes such a venture little better than gambling. That belief is often strengthened when they take note of the statistically high rate of new business failures.
The fact is, though, that there are some key differences between business ownership and a few hours spent in a casino. In the gambling world, the outcomes are truly random and thus outside of your control. And while there are certainly games where you at least have some input into how you choose to play a certain hand or wheel, the fact is that all of the primary components of each game are designed to be beyond your ability to influence. It means that any betting victories you may have are entirely the result of chance. That’s why we refer to gamblers who win as having been “lucky.”
Gambling is a fickle thing, though. For every person who sees Lady Luck smiles their way when they hit the jackpot, there are an untold number of players who lose everything they have. And while professional gamblers can certainly develop elaborate strategies and spread their play out over a larger number of games in an attempt to create more favorable odds by taking advantage of the laws of probability, in the end they remain as vulnerable to the whims of chance as any amateur first-time player. Even the best gamblers can go bankrupt if they experience a long enough series of losses.
Business is only a gamble to the extent that life itself is a gamble. After all, no one can control every outcome in life, and the same is true in the business world as well; unpredictability is one of life’s surest constants. Still, there are clear differences between an activity like gambling that is almost entirely random in nature, and something like business ownership that has no greater randomness to it than most other areas of life. More to the point, in business there are ways to effectively manage and exercise a large measure of control over the odds you face each day. That is, if you have aspirations of achieving something more than mediocrity. On the other hand, if you create a new startup without a clear plan for taking your rightful place among the top thirty percent in your industry, then you really are engaged in a huge gamble and should consider yourself lucky if you manage to remain in business for even five years.
Unfortunately, that is the reality for the vast majority of new entrepreneurs. Most never make it. In fact, the odds are so stacked against the unprepared new business owner, and the outcomes are so incredibly uncertain, that it is actually easy to understand why so many people consider the launch of any new business enterprise as little more than a gamble – and a rather large one at that. That’s also one of the reasons why it is often so difficult to convince others to bet on your great ideas and business concepts. The risks are high, and the potential for loss in such an investment is simply too great for most people to bear.
Just consider the data. While estimates vary, the consensus seems to be that somewhere between 67% to 80% of all new businesses fail within the first 10 years, though the exact numbers are often dependent on the industries involved and other factors in the economy during any given time period. My own studies and observations have revealed that approximately 60% of all new enterprises fail within the first five years, with a minimum of 70% failing before the end of their first decade of existence. Then there’s the fact that many businesses that manage to make it past that first decade do so in a state of intermittent profitability, never achieving either success or stability.
If that sounds like a steep mountain to climb, then you’re obviously paying attention. Still, there are reasons why all of those businesses fail, and there are methods and strategies that you can use to help you avoid many of the pitfalls that serve to trap the lion’s share of would-be entrepreneurs. Regardless of whether you are considering the launch of a startup, a restart, or a start-over, you cannot allow yourself to be deterred by the odds. You should, however, recognize how daunting they are, and do all that you can to ensure that you’re prepared to overcome them.
Let’s be clear: I’m talking about reversing the odds so that they are actually in your favor! Better yet, my goal is to help you become the engineer of your own success so that you can reduce as much uncertainty as possible and stack the odds in your favor. And what would that mean for your chance of business success?
Well, if we can agree that at least seventy percent of all businesses currently fail within ten years, reversing those odds would mean that your business would have a seventy percent chance of success. And I’m not talking about the kind of success where you just keep the doors open and manage to scrape by week after week. It’s my mission to show you how you can increase your odds of realizing the type of success that will have competing among the upper echelons of your chosen industry.
It can be done, and in the post I will explain exactly how you can accomplish this seemingly impossible feat.
Just consider what it would mean to you to know that your business has a 70% chance of achieving true success:
• That increased chance of survival will make it easier for you to obtain seed money from investors.
• If you know that the odds of success are in your favor, you will feel less guilty about receiving investments from friends and family members who might otherwise be placing their college funds or retirement accounts at risk.
• The knowledge that you’ve done all you can do to stack the odds of success in your favor can serve to motivate you and unleash the true power of your business passion.
Before you make up your mind about whether or not this is even possible, remember the words of Henry Ford: “Whether you think you can or you think you can’t. You’re right”
I would only add to that one thing: if you want your new company to be the best in class, then you’ve come to the right place. This is the book for you. Of course, if you think that being best in class does not matter, then it does not matter.