Posted by Jess Saba on Tue, Sep 15, 2009 @ 11:28 AM
Preparation is the Key to a Successful Venture
The National Federation of Independent Business' has found that over their lifetime only 39% of businesses are profitable. Great opportunities take time, energy and money from executives and entrepreneurs. With all the expertise and resources that go into creating a successful business, why do such large percentages of start-ups fail?
John W. Mullins, author of "The New Business Road Test", claims entrepreneurial failure is a result of overlooking the 'fatal flaw' at the first stages of business development.
Mullins says, " Most business plans should have been abandoned before they were written...The good news in all this is that opportunities are not static. They can be shaped in many ways. Potentially fatal flaws are there to be fixed." (The New Business Road Test, p. 21)
A fatal flaw is a fundamental flaw in the opportunity which is easily overlooked if a thorough examination of the business idea is not completed. Identifying the fatal flaw is important in helping entrepreneurs make 'mid-course corrections to reshape the opportunity so that it becomes worth pursuing- before writing a business plan.' (pg.22)
The process of examining all aspects of the opportunity before writing a business plan will help identify and fix issues.
Mullins recommends stopping at certain points in the development of
your business idea to choose to opt out or to continue with the
opportunity. He suggests four possible solutions for moving forward once the critical flaw has been identified:
- Offer a different product or service than originally planned
- Work at a different level in the value chain, as a wholesaler or distributor
- Change the entrepreneurial team to add new skills
Or, if no fatal flaw exists your research may help:
- You improve your product or service, or help you offer a solution that is faster and cheaper than the original.
- You may be able to identify a sustainable competitive advantage
- You may gain greater confidence in the team you have chosen.
If you have an opportunity that is worthy of your time and energy you owe it to yourself, your partners and your investors to make sure you can offer a sustainable product or service that attracts customers and capital.
Finding and fixing your fatal flaw before you write your business plan will give your idea a stronger foundation, your investors greater confidence and you the best chance at starting a successful business right out of the gate.
Click here for more information on John W. Mullins' book, " The New Business Road Test."