10 Things An Entrepreneur Needs To Know Before Starting A Business
There’s risk in everything, but don’t listen to the rumors. There is no need to quit your job, or be a school or college dropout to get in this entrepreneurship game. You don’t have to invest your entire life savings into a new venture. Success or failure as an entrepreneur shouldn’t be treated like a gamble. Entrepreneurship should be the opposite. It should involve testing and validating ideas. It should involve trusting, but verifying, assumptions. It should be about maximizing upside and minimizing downside. Sure, it’s great knowing you beat the odds, but how will you feel if you don’t?
Entrepreneurship can be a tough game. Almost no college or university level education can prepare you for it. Most of the learning happens on the job. Let’s be honest, there’s no ‘one size fits all’ answer to this question. That said, we’re talking about more than industry-specific knowledge. We’re talking about lessons that hundreds of entrepreneurs had to learn before achieving success. Rather than let you figure it out as you go, or scour the internet looking for answers, we’ve turned to the experts for a few words of wisdom. Creating a business is a huge undertaking. It’s not a simple path, and often includes details you may never have considered.
Here are some of the important things you need to know before starting a business:
Don’t Trust Records
One of the most important things to do before starting a business is to research the competitive landscape. Just because you have a brilliant idea does not mean other people haven’t also had the same idea. If you can’t offer something better and/or cheaper than your competitors, you might want to re-think starting a business in that area. Stop trying to predict the future. Instead, focus deeply on your most pressing tasks today. Get the menial stuff out of the way first. Then dedicate the rest of your your day to deep work on the tasks that will have the biggest impact.
In time, you’ll notice opportunities will begin to emerge tomorrow as a result of what you accomplished in the past. You could have the most valuable idea in the world but, if it’s in front of the wrong audience, it’ll be worthless. Everybody wants something, but nobody will take just anything. Proper positioning is half the battle, so pick a niche, and develop a deep understanding of the needs within it before taking your idea to market.
Do What You Like
Stop trying to predict the future. Instead, focus deeply on your most pressing tasks today. Get the menial stuff out of the way first. Then dedicate the rest of your your day to deep work on the tasks that will have the biggest impact. In time, you’ll notice opportunities will begin to emerge tomorrow as a result of what you accomplished in the past. Don’t have customers? Then you’re not an entrepreneur. Don’t broadcast your title, just put in the work. The title will follow. Like I said in my first point, focus on doing meaningful tasks day in and day out. The rest will work itself out. Being an entrepreneur takes confidence. But there’s a dichotomy, because at the same time you are building confidence, you are constantly humbling yourself and assessing your situation as honestly as possible.
Otherwise, you’ll just keep spiraling out of control and never make any real progress.
In fact, you probably won’t know anything when you first start. Start anyway. Nearly every entrepreneur suffers from the same curse: we like to start things more than we like to finish them. In other words, if you are a good entrepreneur, you’ll have a lot of great ideas. Most of them would probably work out well and make you a lot of money. However, that doesn’t mean you should pursue them. Pick one and go with it until it dies or it makes you rich enough to buy a private island.
Get A Mentor
Having a good mentor is like parental guidance. You want someone to hold you accountable for your actions, and provide guidance through your journey. But choose your mentor wisely. It should ideally be someone who has a strong track record of success in business, believes in your idea, and is willing to give you honest feedback without worrying about protecting your feelings. Every entrepreneur should be able to answer the question, ‘Why are you doing this?’ It seems like a simple question, but there will inevitably be times when things go wrong, hope is dwindling and you need to remind yourself of why you’re in it.
As an entrepreneur, building and growth is a process that never fully ends. It is great practice to give yourself a mission statement to maintain focus on the project goals as well as personal ones. The No. 1 thing is that they should have a coach or mentor.
Focus On People And Their Needs
You could have the most valuable idea in the world but, if it’s in front of the wrong audience, it’ll be worthless. Everybody wants something, but nobody will take just anything. Proper positioning is half the battle, so pick a niche, and develop a deep understanding of the needs within it before taking your idea to market. You shouldn’t have a single thing on your website that doesn’t drive sales.
When it comes to building an ecommerce site, there’s an awful lot of bells and whistles you can play around with and a million different metrics you can track. Don’t get distracted. Business is all about people. You can’t do it all by yourself. Focus on people, understand their needs, compensate them adequately, and invest in their training. They may or may not stay with you, but it’s important to continually train them.
Money Isn’t The Only Goal
Focus on building a business so incredible people throw money at you. Like driving down a lonely highway on a dark, foggy night, entrepreneurship can be a little scary. But hopefully at least one of the above tips will help you navigate through the fog a little easier with more confidence. If you are just getting started with your business, just remember this: keep driving through the fog. Your future self will thank you.
Survey Target Market
Every entrepreneur should be able to answer the question, ‘Why are you doing this?’ It seems like a simple question, but there will inevitably be times when things go wrong, hope is dwindling and you need to remind yourself of why you’re in it. As an entrepreneur, building and growth is a process that never fully ends. It is great practice to give yourself a mission statement to maintain focus on the project goals as well as personal ones.
Survey a focus group of the target demographic for the service or product. It is crucial to make sure you are delivering what your customer wants, not what you want. This will give you insight into your customer’s buying decision and save you lots of experimenting down the road.
Get Legal Game Right
If there is one thing I would advise for all entrepreneurs before officially opening a new business, it’s to seek legal counsel. We often make the assumption that legal counsel is for when we get ourselves into trouble, but preventative and proactive legal preparation can be the very best way to set your business on the path to long-term success. When you call on legal counsel after you’ve run into a problem, it’s often too late or could critically impact your business in both the short and long term. Investing in their insight at the start of your business can pay a huge return later on by keeping you out of trouble before you even get into it.
You need to get organized with your taxes and fees. You have to figure out how much your payroll is going to be in order to make your tax payments timely. The timing can vary depending on your payroll. You also have to figure out other business taxes, such as city, county and state. There isn’t one list of all the fees you may have to pay, so you need to get organized and figure this out ahead of time. Forgetting and filing late can make those late charges add up quickly.
The most important thing a small business owner can do is plan for cyclical downswings in their business activity and revenue. There is a lot to be done when you’re not providing your service or selling your goods. Make a list of marketing activities, touch base with contacts, organize your files and office. A lull in business is an opportunity to improve and plan. Likewise, revenue will come in waves. Cash flow is not a constant trickle, but expenses are.
The small business owner should plan on either starting with cash reserves or trying to acquire a line of credit from a local bank. Then create a compelling offer, take it to market, validate it by generating cash flow and start a dialogue with your customers to keep refining that compelling offer. That’s it. Don’t overcomplicate it. You’ll have plenty of complexity to deal with later as your business starts to grow. Ask yourself: “What would this look like if it were simple?”
Map Out A Strategy
When starting a business there are so many things to consider, and oftentimes, there isn’t a clear idea of where to begin. There are various business mistakes you can avoid, but if you remember these simple steps before starting your business, you can start on the right track and ultimately stay there. Many entrepreneurs often jump the gun with their ideas and forget critical stages of the planning process, specifically creating a business plan. A business plan helps you map out how to get from your starting point (with your current resources and knowledge) to a point in the future with new capabilities. Your business plan is the backbone of your business–it helps investors, employees and yourself remember the big picture goals. Don’t take this step lightly.
Don’t Give Up
In order to create strong company you need to hire skilled people and finding professionals is really, really hard. So don’t be afraid to hire people who are better than you. Don’t compromise with your hiring because you are afraid that somebody else will take your place as a leader. You should be happy if you can find better people for your team and try to keep them as long as you can. Raising money is not easy and don’t happen overnight. You will hear “No!” more than you can actually imagine.
Details are really important and you will learn to pay the right amount of attention to them. You will learn to look at the big picture but never to forget the small parts of it. Your understanding of success will change many times. So will your perception of failure. Success comes after many failures and you need to be prepared for both of them. Failure is hard, but success is not easy either. Stress will be unbearable. You expect that, but nobody is ever ready when it comes to working under so much pressure.
And your personal life may suffer. The clear line between your personal and professional life will get so blurry. Your time will be never enough and there will be always something that needs to be done. You will think about quitting many times, but you will never actually do it. Natural born entrepreneurs never stop following their passion, no matter what happens and how rocky the way gets.