We Need More Successful Startups

Earlier this year, Jim Clifton, Chairman and CEO of Gallup, warned about the declining “birth” rate of new businesses compared with the current “death rate.” We found his Gallup Business Journal article so interesting that we think some of the statistics he quoted deserve repeating, as they underscore the increasing lack of successful startups.

According to the article, 470,000 businesses are “dying” each year while only 400,000 are “born” leaving a deficit of 70,000.  This was not the case prior to 2008 when startups outpaced business closures by about 100,000 per year. The change has happened over the past 6 years according to Clifton who is analyzing data from the U.S. Census Bureau. Add to that, based on who you talk to, the chances of startup survival are only about one in 10.

New businesses have to have some basic philosophical understandings from the outset in order to have a better chance at success.  Knowledge of business form and function won’t do it anymore than knowing how to build a ship will make you a good captain.

Skilled captaincy requires adherence to a set of standards, strategies, and values that we believe are teachable, albeit rarely taught in school. It also requires a certain level of experience in the real world that is either learned by doing or gleaned from other successful entrepreneurs.

This is why we are so keen on business navigational principles – beyond the launch. We discovered a set of Guiding Principle for Success we used in our business that got us through the most trying times and the most difficult challenges.

We spent a year creating a special training session specifically designed for aspiring, start-up, and growth phase entrepreneurs. Our course, Spend Less – Monetize Faster with the Entrepreneur’s GPS (Guiding Principles for Success), provides these navigational principles to help start-ups succeed. We created this program as an adjunct to the entrepreneurship and business courses now being taught, not to replace them, but to take them to a more practical level.

We put the course together as a 4-part series, each with one hour of video content followed by one hour of live Q&A each week for 4 weeks. The 4 segments include:

1. Starters for Start-Ups. This begins with why you are in business. If you want to build and monetize your brand equity, it will show you the proper mindset to organize your business from day one to prepare for a monetization event. This includes how you discover the metrics that make your business an acquisition target, how to organize your goals and milestones, and what records you must set up to best prepare you for acquisition.
2. Being Resourceful. This covers strategies to manage your cash flow so you can pay your bills and reduce your need for capital. So many start-ups fail because they run out of investor capital before they achieve cash flow. We describe how you can save money and extend your credit by forming strategic alliances with your creditors, buyers, and even your vendors’ salespeople.
3. Engaging and Empowering Your People. Turnover is the #1 hidden cost of business. When startups lose key people, they lose corporate knowledge, customers and vendors. This segment explores how to find, orient, and keep good people. It offers ways you can put everyone on the same team and get more involvement and productivity from your people with a sales-based, production-paid, positive company culture.
4. Sales is King. Lack of adequate sales is the most common reason for startup failure, yet sales training is taught only in a hand full of schools. In this segment we examine the various levels of sales that must be made between you and your ultimate customer. We look at the motives each level has to move your product. This segment also reveals the wisdom of understanding the distribution channel requirements before finishing your product and package design.

As Clifton says, “This economy is never truly coming back unless we reverse the birth and death trends of American businesses.” We want to help by sharing our experience, mistakes, and discoveries with the next generation to create more successful American businesses.

Please tell your friends and associates who are thinking about starting a business, who have launched a new business, or who are growing an existing business, to check out the Entrepreneur’s GPS. It may just make the difference in their success!

.