The fear of the dreaded “f” word has being the reason many people has refused to start-up business or investment of any kind. But even the most successful entrepreneurs experience their share. It’s simply part of the game. And who knows? It could even serve as the foundation for something far bigger and better.
It’s true that more than 90 percent of startups fail. And recognizing this right off the bat will prepare you intellectually, emotionally and financially and this 90 percent that fails were the 90 percent that take there eye off everything like failure. Pretending like they where too big, or too smart to fail.
Why to some this may seems, like been negative or being paranoid. It makes you smart. First there is a extended and a huge difference between preparing for failure and thinking you are going to fail. Preparing for failure makes you practical and thoughtful about all the possibilities that may occur. And even encourage you to thrive. Because being prepared quells fear and Prod’s you to keep going.
How preparing for failure looks like.
1. A good insurance policy can save your neck when disaster strikes.
Asses your business assets, and get them insured when possible. General liability insurance can keep everything from lawsuit to natural disaster, even from bankruptcy.
Don’t make the mistake of thinking it can’t happen to you. All businesses hit bumps in the road. It’s the successful ones that cover their bases before disaster strikes.
- Having a balance life, while building your small business.
- Is business franchise right for you?
- Should I partner with my friend?
- Business partnership, it is right for you? Red flag warnings your business partner will drag you down.
- How real entrepreneurs defers from small business owners.
Take for example, a $50 monthly insurance premium would only cost you $600,000 a year. But if a $600,000 incident-which isn’t unreasonable for medical expenses, legal fees or commercial building costs occur that year, your premium will have paid for itself a thousand-fold.
2. Having a safety net:
Nearly 40% of Americans not having up to $400 set up for the rainy days. With out borrowing or selling something. It is not less for small business. Many small business don’t have emergency funds set aside.
Putting up safety nets protects you personally, regardless of what happens to your business, the best place to start is your emergency savings account.
The best way to finance this account. Is to think about your worst-case scenario. How much will you get sued. Or any other unexpected happens.
But also but in mind. Your emergency savings account is for emergency only. Tempting as it is! Don’t invest it or dip into it for in-the business needs.
3. Keeping an eye on trends.
Information are emerging at the speed of light. New and better way of doing things are emerging out every day. So you have to keep tap on trends.
You have to always reflesh yourself for trends. Don’t make the mistake of scoping your outdated information.
You don’t even have to wait for social changes to land your doorstep. Keep an eye on data. To learn how, for example. You can future proof your hiring strategy. If their schedule and compensation expectations are right. Maybe hiring seniors is smart-approach.
4. Signpost to tell when it’s time to throw in the towel.
Entrepreneurs are some of the most driven people in the world, but running a profitable business takes more than that.
You have to set parameters for project and initiatives to determine when it’s time to pull the plug on them, if you’ve already invested $100,000 in new product development, ask yourself should I keep going? Will the payoff still worth it.
Decide on a profit target for your product before you start building it out. That way, you know exactly how much you can spend before the project.
Will also appreciate you taking time to read our blog up to this extend. And we’ll be glad to hear from you, in a comment. Thanks.