Launching a new business venture is a great adventure. You will experience moments of both joy and despair, and your ultimate success may depend upon how well you answer a few key questions before taking your first steps: Where are you going and why? Who are you taking with you? What resources will you need for the trip? How do you prepare for the challenges along the way? How will you pay for the trip? What will you do when you arrive? Answering these questions can be the difference between success and failure for your new business venture or nonprofit organization.
Where Are You Going?
A successful hiking trip begins with selecting a destination and hiking trail that suits your skill, time, and resource constraints. Successful entrepreneurs likewise start with a plan for where they want to go with their new venture. Life experiences, passions, or, on occasion, serendipity may serve as the inspiration and motivation for you to launch out in pursuit of a goal. Putting more thought into planning your journey will often reduce the time it takes to achieve your goals, as well as reduce or minimize the challenges you face along the way. Taking the time to prepare a basic business plan and work out the major elements of your new venture, including the resources required to achieve a sustainable level of success, is fundamental to giving your new venture the best opportunity to succeed.
Who Are You Taking with You?
Solo expeditions may appear attractive to the rugged introverts among us, but no serious business venture will achieve lasting success without a band of dedicated and competent sojourners willing to come alongside you with the goal of reaching the same destination. Identifying, recruiting, retaining, and rewarding key team members is one of the most important steps you will take in your entrepreneurial journey. None of us can do everything well or take on everything by ourselves. Over 50 years ago, the Gallup organization identified a common characteristic possessed by every successful leader: he or she knew his or her strengths and weaknesses and hired others with complementary strengths. Understanding how to recruit, hire, and retain the right employees, and how to steward wisely your precious resources (cash, equity, and personnel) to keep your new team members motivated, will be critical determinants of both your short-term and long-term success.
What Resources Will You Need?
Developing a solid packing list is the first step in planning a successful hiking trip, whether it be a day trip near to home or a weeklong adventure in the backcountry. The right preparation, equipment, and supplies make the difference between joy and misery along the trail and at the end of the journey. The same is true for your new business. Starting with a carefully developed list of the key resources you need to launch your new business will define the people, space, timing, and capital required to launch your venture and produce the products or services you will offer to potential customers. Growing the business will require you to navigate small and large opportunities and to avoid choosing those opportunities for which you are ill equipped.
The best hiking trails often come with forks in the path, requiring you to make a choice that will impact directly the length and complexity of the journey. You will also encounter similar choices as your business venture matures over time. Adding new capabilities through expansion or by acquisition, exiting a line of business by termination or divestiture, or entering into a strategic joint venture with a domestic or international business partner all bring challenges and opportunities that require thoughtful planning and careful execution.
Will You Encounter Any Special Challenges?
Backcountry hiking in many parts of the United States usually entails the need to prepare for encounters with shifts in weather, difficult terrain, and potentially unfriendly wildlife. Procuring a reliable can of bear spray and a bear-safe means of food storage often invokes a sense of urgency in direct proportion to the wording on the warning posters at the trailhead (e.g., “A mother grizzly bear and her cub were recently seen in this area.”). Starting a new business in a specialized industry can also come with unique challenges and obstacles that are best addressed at the beginning of the journey. In addition, regardless of how carefully you may plan, conflicts and disagreements with employees, customers, and competitors often result in situations where having an experienced attorney at your side may be the difference between a reasonable resolution and an abrupt end to your great adventure.
How Will You Pay for Your Journey?
Many new entrepreneurs are only too eager to start raising funds for their new venture before taking time to work out answers to the basic questions they will almost certainly face in conversations with potential investors. Funding for most new businesses comes from a variety of sources, including self-funding, friends and family, angel investors, venture capital investors, private equity investors, and strategic investment by companies in your same industry. Understanding the terminology, structure, timing, and return expectations associated with these various potential sources of capital will help you make better choices in selecting the source of funds for your new venture. The terms upon which you receive investment capital will impact you and your business at various points along the journey. Understanding how to identify and utilize these resources wisely will position you to enjoy the fruits of your labor in a more lasting and meaningful manner. Regardless of the source of your capital, two truths on which you can usually rely are that (i) your revenue estimates will be too high, and (ii) your projected expenses will be too low!
What Will You Do When You Arrive?
“The joy is in the journey” is an oft-used colloquial expression, but it is a poor answer for the entrepreneur who has toiled for decades in a successful business venture, only to find emptiness and despair at the end of the journey. Understanding why you are doing what you are doing and how you can transition your enterprise successfully to the next generation in your family or to a strategic or financial buyer will become increasingly important to you over time. Defining your values and your objectives at the outset will help you establish a framework for your business venture that positions you to achieve your objectives in a manner that protects and promotes your values. Your journey as an entrepreneur will most assuredly unfold in a manner far different than your original plan, but the discipline of planning will equip you to navigate the unexpected twists and turns along the trail. We look forward to the privilege of joining you in your great adventure!