Any successful entrepreneur needs at least a few things to succeed: a great idea, an almost evangelical belief in it and a solid implementation strategy.
But how do you know when it’s time to let go – or shift focus – on a business idea that’s just not working? How long should you persist before using what you’ve learned to ‘pivot’ into something new?
“People go into business with this really naïve approach: ‘I just need one idea’,” says business coach David Guest.
“There’s a point in time where you ask – ‘is the idea really valid, is there a market for this idea, and is it going to make a difference? Why is the marketplace not valuing what I’m offering?’”
He says in reality entrepreneurs need many good ideas – but more importantly, the ability to roll them out. This comes through testing, taking the product or service to market, getting feedback, adjusting, then repeating the process many times over.
People go into business with this really naïve approach: ‘I just need one idea’.
If business owners fail to do this, along the road they’ll often realise that what they think the market wants – and what the market actually wants – are very different, says Guest.
Persistence and the ability to withstand a few rejections are crucial in chasing success. But clinging on to an idea that is showing no signs of taking off, or is just outdated, can be dangerous.
“You wouldn’t want to be running a video hire shop in this day and age,” say Guest.
“Things are changing faster now than they ever have, so your ability to adapt to the marketplace is probably more important than ever.”
Guest says when it comes down to it; business owners need to listen to their internal compass.
Persistence and the ability to withstand a few rejections are crucial in chasing success.
“There are internal signals, and you have to trust your gut a lot of the time.”
So if you’re preparing to steer your small business in a different direction, take what you’ve learned and put it in to practice on your next attempt.
Guest recommends developing a solid testing strategy (this could include crowdfunding or focus groups) and bouncing the idea off someone you can trust, such as a mentor, coach or successful businessperson.
Failure is a key to learning, says Guest.
“However make it too big a failure and it knocks you out of the game.
“You’ve really got to budget your expenses and have some milestones or checkpoints along the way.”
Larissa Ham is a Melbourne-based freelancer. She write for publications including The Age, The Sydney Morning Herald, The New Daily and Forge magazine, and also shares money saving tips at Hey, Little Spender!