Over the last few months, I’ve met lots of entrepreneurs with some great projects (not all). Some I’m sure will do well, some I’m pretty sure won’t. Though there are lots of theories on why start-ups fail, my own experience is that it is almost always because of the person, not the idea.
Fast is best?
Specifically, I’ve seen two recurrent problems. Start-ups like to be dynamic, creative, quick (which is relative) and in many cases, they think that means that they don’t need a plan, structure and all the trappings of slow, risk averse, process driven organisations. The end result is that in many cases, they completely lack focus and don’t make the difference between what is important and what isn’t. They may either succeed by accident rather than design or simply fail. Accepting that failure is not only a possibility, but a likelihood for many, can help remove the hand break and actually increase your chances of success …. but that’s for another blog.
My advise, don’t spend weeks and months working on a detailed plan but at least have a business model to help you structure your idea and approach. This simple video explains it well
Show me the money
The second recurrent problem is what the subject of this blog is about. They don’t have the financial resources to enable them to succeed. Its the old cliché about needing money to make money. You don’t necessarily need a lot, but enough. Unfortunately, if your planning is bad you are unlikely to know what “enough” is.
In many cases, they invest their savings into the creation of the business and hope that the sales will come relatively quickly enabling them to survive. For 3 projects I’ve met in the last few months, this isn’t happening. Of course there is a gap between what they thought would happen and the reality of selling their product/service. Now they are faced with the possibility of needing to find a job and either abandoning their business (which are generally good ideas .. it just takes time) or doing the two in parallel which is unlikely to help make it a success.
No matter what market you are launching yourself into, the reality is that there is more and more competition and it takes time to establish your brand, test your sales approach and convert leads into sales. This could be as quick as 2 years or as long as 5. That period is the “valley of death” and you need to be able to survive it, to see success on the other side. When it comes to finding money, it ain’t easy if you go to your bank but there are lots of other options:
There it is
Public money – there are things like the http://www.aidesdirectes.be/bourse-preactivite/bienvenue/index.html if you are the “market assessment” phase. There are also subsidies available to pay for external help and reduce the amount of money you need to get things done such as http://www.werk-economie-emploi.irisnet.be/aides-et-subsides
Crowdfunding – my own personal favourite of course. In reality, at least in the beginning, this is driven by “Friends, Fools & Family” but depending on how you structure it, it can also be a good source of pre-financing. There are too many options to quote here when it comes to platforms in Belgium but contact me if you’re interested.
Depending on the stage of the project there are business angels, venture capital, private funds and of course, the banks. Let’s face it, Belgium has more than enough money but unlocking it and having the right source at the right time means that start-ups need to think and plan a little bit more that seems to be the case at present.
Fail fast and cheap
If you are going to fail (again, I don’t see that is something necessarily negative), fail fast and cheap!