'Everything begins with an idea'
“Everything begins with an idea.”
Earl Nightingale may not have been talking about starting a business when he dropped this pearl in the 1950s, but the wisdom behind it holds to this day.
According to the Idaho Department of Labor, 9,212 small businesses opened their doors in 2023 — but the U.S. Bureau of Labor reports that one in four small businesses fail within their first year of operation.
Each one of these businesses probably began with a good idea — even the 25% that fail.
But why do they fail?
And how do you keep that from happening to your great idea?
Paige Olsen is the director of the Silver Valley Economic Development Corp., a group that works directly with several local and state government agencies to help foster the development and continued growth of local businesses. Olsen has seen numerous businesses open their doors, but she has also seen several close shop — often within that short, one-year window.
“We've seen quite a few small businesses come and go, lifespan is hard to predict,” Olsen said.
The successes or failures of these businesses often can be determined by how they begin.
The first thing Olsen looks for is research.
Have the new proprietors looked into their market and determined an actual need? Is there any competition? Does the business serve the community it exists in?
If the idea is still viable after asking these questions, Olsen then looks at the business plan — or if there even is one.
“Get a business plan together,” She said. “Figure out your upfront costs, then figure them out again. Will you need to take out a small business loan? Or do you have working capital to start off? Will you need employees right away or can you start off small? People don't take into account that employees are an overhead cost when figuring out their upfront costs.”
Those things often scare most people away from taking the final plunge and pursuing their ideas and goals. But for the folks who put the time and effort into these initial steps, it substantially increases their chance at survival, Olsen said.
Once a potential business owner has worked out the kinks in their initial planning, they have to find a location.
“Location is key,” Olsen said. “Who is your main demographic and are you going to be accessible to them?”
Those questions and their answers may force a person to reexamine their plan. Can they afford the best location? Or do they need to make adjustments… either in location choice or the amount of money they’re willing to spend?
According to Olsen, this can be a tricky hurdle to navigate. People have a picture in their heads of how they want their business to look and feel, and the location is a major part of that decision.
Once a business arrives at its grand opening, the owners now face a new series of obstacles, beyond just the simple dollars and cents.
This is when the clock begins to tick on that one-year mortality rate that plagues new businesses.
“Common traits among successful ones are owners who work their business, have consistent hours, and are a part of the community,” Olsen said. “Successful businesses allow their business to grow, as business grows. Not having too much overhead costs upfront or trying to do too many things before they have proven they can run a successful business. It's a marathon, not a sprint. If you want to play the long game, you've got to give it time.
Most of the unsuccessful businesses don't have consistent hours, you never see the owners, or they try to either do too many things from the get-go, and end up with too much overhead costs, or don't put enough into their business to draw people there. Having a mapped-out business plan is key. Coming up with a business idea is the easy part, but putting the pieces together to make sure they actually fit makes the difference in succeeding or not.”
Olsen acknowledges that the process can be overwhelming and intimidating, especially when you’re at the mercy of financial institutions as well as your own needs.
Fortunately, organizations like the SVEDC, and other community economic resources are in place to help navigate the many pitfalls that come with starting a new business.
“We host small business workshops in partnership with the Small Business Administration and Small Business Development Center,” She said. “We can also put you in touch with small business owners and experts to help you with any aspect of your business including conception, loans, all the way to opening your doors.”
The path to opening and operating your small business is not easy. Olsen, a small business owner herself, wants people to understand that it is worth it if you’re willing to give your idea the attention and effort that it needs to succeed.
“I think the idea of owning a business is so romanticized and people like the idea of being their own boss,” she said. “But they don't grasp the realization of what that actually means. It's so important to grow along with your business and be patient. A lot of blood, sweat, tears, and lack of sleep goes into running a successful business.”
