Past performance is not indicative of future results. It’s the mantra of any investor and it’s also true of the modern business landscape. There are a number of reasons why you can’t draw inspiration from the past, despite how accessible this strategy may be to execute. So if you’re about to embark on a new chapter and need the metrics and manual to achieve sustainable growth, don’t look back, but instead set your sights on new data and trends that are gaining traction. Not convinced? Let’s discuss why past performance might not bring a new business the same success the second time you try something.
It isn’t and won’t ever be a relevant comparison
Very few businesses are cyclical and even those that are will still experience market conditions and external influences that will change things to varying extents. With innovations like single touch payroll software, digital workflow and sophisticated targeting – the game, and all players, have changed. As a new business operator, you might be itching to roll out a strategy that once brought you success, only to find that those channels or audience are no longer relevant to modern times. Pounding pavement to reach new, untapped customers might actually be met with more resistance than you remember, when a simple geo-targeted campaign might be an easier way to engage your local market. Now, this isn’t to say that traditional communication isn’t valued, but you have to recognise that there are other, more measurable ways to reach and track success.
The overheads have changed
As a new business, you might feel a little constraint and resigned to the fact that you won’t break even until the fourth year – isn’t that the yardstick that has made the rounds over the last few decades? This is not necessarily true, and should not be the metric with which you govern your business. In previous years business was a brick and mortar operation with endless overheads, but new business owners don’t have to tie themselves to the same fate. Rather than committing to a commercial space, why not run your business from a co-working space for the first year, or even run things from your own home? You could also outsource work if and when you need to with a team of remote workers, rather than hiring employees and honouring the compliances and requirements that come with that responsibility. There is no reason why you can’t sprint out of the gate in our new business venture, so don’t look to the past at how other businesses have started out as you may miss an opportunity for growth.
The market may not adopt a business that already exists
As a new business entrepreneur, your mission statement should be more than just replicating what others have created in the past. This approach will leave you trying to play catch up, and loyalty is hard to compete with as a new player. As we have seen with Airbnb, Uber and food delivery services – success lies with taking a familiar concept and adding a modern lens. When you look back at the successful businesses that have climbed the ranks, make sure that you are assessing whether this is a movement relevant to the 2020s and whether your customers have an appetite for what you are bringing to the table. The innovation lies somewhere between breaking the wheel and improved products/services, so ensure you are looking back, forward and sideways.
Success parameters and measurable metrics are more accessible
In years gone by, businesses tended to benchmark the success of their operation against ‘vanity metrics’ which include things like page views, likes and comments and sign-ups. While these are great to measure, you can absolutely get deeper into the details now and measure the length of time a user spends on-page, which buttons and call to actions they respond to, and how far your users are down the funnel. If you are hoping to dust off an old business plan and apply it to your new business, it will not capture these parameters and metrics and could be robbing you of an opportunity to gain greater visibility. Don’t fall down the rabbit hole of chasing likes and measuring your worth pages on click-throughs, there are deeper insights that can be uncovered which illuminate far more than they previously have, and you can be sure that you competitors are utilising these insights.
The past is a comfortable place to spend time, especially if you are working towards goals that have brought you success previously. Given you are launching a new business, you need to be looking forward and leveraging new tools to gain a greater level of success that exceeds what you have achieved in the past.