Have you ever been to the Grand Canyon? I try to see it as a spectacular and majestic span created by nature. But, another part of me sees a big crack in the earth that is a long way from one side to the other.
The gap is even more significant in the chances a business startup has when they have a plan for success, or there is only hope to be successful. Hope does not get you operating capital. Hope does not attract investors. Hope never replaces a business plan, and hope is not a strategy.
Today, more than ever, a solid, well thought strategic plan for the conception, development, launch, and growth of a business or business idea is required. I do not know a credible investor anywhere on the planet who will invest in your business just because you told them it was a great idea and you had high hopes for it. It’s just not going to happen.
Years ago, I had plans to go with a friend across the country and see every major league baseball park along the way. We would start in Phoenix, Arizona, and end at Yankee Stadium in New York. My friends’ job was to plan our best route, to see the most stadiums. When we met to discuss the strategy, he told me that he didn’t believe how easy his task would be. So I was excited to see his plan.
Here was his strategy; We drive east until we hit the Atlantic ocean, then north until we arrive in New York City.
He was serious as a heart attack, which I nearly had. His plan was not a strategy; it was a meandering drive hoping that we would end up in some Major League cities. A strategy would have been to plot out our destinations in Google Maps, connect the dots and enjoy some baseball.
Investopedia says that in 2019, the failure rate of startups was around 90%. The research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. The Investopedia report went on to say that the reasons for failure included “money running out; being in the wrong market; a lack of research, bad partnerships, and ineffective marketing, to name just a few.
This report also made some suggestions on how startups could avoid failing. The four that led their list were setting goals, proper research, loving the work, and not quitting. And, if you haven’t figured it out by now, there is glue that holds these suggestions together. That link is in making an effort to create a success plan or road map. A strategy that, when written, shows your vision to make your business work. You can hope all you want, but that alone won’t keep the doors open.