Every new business owner launches his company with the hopes of making it into next Amazon.com. But how many can tell whether it will even be a fraction of that successful. Knowing ahead of time whether your company will be a grand success or a big bust can save business owner lot of anxious moments in life.
While there is no crystal ball that can provide foolproof prediction concerning your company’s fate, there exists a fairly reliable predictor. It is called the Investor Test, and when properly applied, it can provide an excellent gauge that tells you whether your business model will ultimately succeed. The Investor Test can also provide valuable insight into how to address potential problems or challenges that are likely to arise in the course of launching and establishing your new business.
What is an Investor Test?
The Investor Test is a simple gauge that can provide a quick and highly accurate assessment of your potential venture. Here is how it works. After you have been in business for about three months, and at regular three month intervals, take time to answer these simple questions: can your business attract any new investors to invest in your company? Have you hired at least one new employee? Have you gained one or more new clients or customers?
If your answer to all these questions is “no,” then you may run into difficult times ahead. If you have the financial wherewithal to continue, you should seriously consider making a pivot – to a new business model, a new customer base, a new location – the nature of the change you must make varies based on your original business model and other factors. If you have no financial resources and cannot raise additional capital quickly, then you must seriously consider the viability of your business, as painful as this choice may be.
Persevere, Pivot or Punt?
The Investor Test is one of many tools at your disposal to predict the ultimate success of your startup or to enhance your chances of making your business a success. The quality of your management team, the diligence of your market research and of course, your product or service all play essential roles in determining whether your business will ultimately sink or swim. The strength of the Investor Test lies not only in its predictive power, but also in how it can serve as an advisory tool.
If the results of the Investor Test are positive, you can move ahead with reasonable confidence and assurance that you are following the right path. The proper pieces of your business are in place and functioning properly. If the Investor Test predicts trouble ahead, do a deeper dive for clues about where deficits have arisen. If your product or services aren’t drawing customers, is the problem poor marketing or a product that just isn’t ready for prime time? In the former case, increasing your company’s profile may yield fruitful results. However in the case of product issues, you must seriously rethink whether you should pivot toward a different line of business, or call it quits.
Jennifer Watts is a small business owner and mom of three small children. When she gets a free moment, she likes to blog about all things business. If you are searching for a web host, go to www.webhostingreviews.ca to read the latest reviews.