It can be exhilarating to start a new venture; however, getting your business off the ground and moving forward can be riddled with challenges. There are millions of people with great ideas, but only a small percentage of them actually deliver on their vision; in most cases, the difference between someone who is successful and the rest of us is not luck but rather preparation, mindset, and execution.
A large part of entrepreneurship is about launching products, but the basis of entrepreneurship is about addressing people’s real issues in an ongoing manner, and it is done while managing uncertainty associated with launching or managing a business.
The principles listed below will help you establish the groundwork for your business no matter whether you are launching a start-up, providing local services, or launching an online business and to greater ensure that your business is successful in the long run.
1. Start With A Real Problem — Not Just An Idea
A common mistake that beginning entrepreneurs make is that they fall in love with their idea, not with the problem that the customer has. A successful business eliminates pain, saves time/energy, reduces cost, or otherwise enhances the person/product/service that the customer would be purchasing from you.
Examples of the questions you need to ask yourself before creating your business or product:
You must be able to identify the individual’s problem(s) that you are attempting to solve:
- Does anyone need this product/service?
- How often do they have this problem?
- Is anyone already paying for this product/service?
- Is this an urgent problem for the customer?
If no one is attempting to fix an issue, there’s no way they will pay you to fix it.
Amazon didn’t achieve success because online sales are a cool idea… it’s because they solved two problems — lack of choice in local market and the time-consuming nature of purchasing.
Action Item: Prior to developing your product, talk to at least 20 potential customers. Do not include your friends — true potential buyers.
2. Confirm Demand Before Developing
The most common error made by entrepreneurs is the time and money spent on building a product no one will buy.
Validation means that you can provide proof that your product idea has an existing demand prior to investing time and/or money. Some ways to validate your idea:
- Landing Pages with Signup Forms
- Pre-orders
- Surveys
- Manually Prototyping Services
- Social Media Analytics
The Lean Startup philosophy teaches that you should build: Create and build a Minimum Viable Product (MVP), the simplest form of your product that you can use for testing the viability of your core idea.
Build –> Measure/Try –> Learn –> React –> Repeat
Will save you time, money, and emotional stamina!
3. Emphasize Cash Flow Before Branding
Many entrepreneurs are focused on creating logos, choosing colors, and increasing their follower counts on social media, but they neglect to focus on generating cash with their companies.
A company relies on cash flow to survive, not on its aesthetics.
Your initial priorities should be:
- Getting your customers to pay for your products.
- Creating repeat customers.
- Developing sustainable pricing models.
- Establishing a compelling value proposition for your customers.
Branding is important, but there is no point to branding if there isn’t any revenue; it’s simply decorative, not a legitimate business.
4. Focus on Solving One Problem Exceptionally Well
Trying to do too many things at once will only result in failure for startups.
The most successful companies dominate a niche before expanding into other areas; even the largest companies started out small. Apple, Inc. started with one personal computer and expanded into telephones, music and services over time.
Choose your target market and your solution specifically.
Instead of “We help businesses grow,” use the following statement: “We help small restaurants get more business through online ordering.”
Customers are more likely to be drawn to your business if you clearly communicate what you do.
5. Establish Systems and Processes, Not Just Work
If you are relying solely on hard work, you cannot grow your company.
If your business only runs when you are working, then you have created a job, not a business.
Start creating documentation for your processes as soon as possible:
- How to onboard a new customer
- Sales scripts for your sales team
- How to market your products/services
- How you deliver product/service to the customer
- How to keep track of finances
Systems allow delegation, and delegation allows growth.
6. Understand Sales Even If It’s Not Your Thing.
Sales May Be Compared To How You’re Convincing Someone
You Must Be Able To Articulate Why Your Solution Has Value Or Your Company Will Fail.
The Entrepreneur Should Know How To:
- Listen More Than Speak
- Ask Questions That Are Good To Listen To
- Find Out What Makes People Want To Buy From You
- Answer ‘No’ From Other People
- Know How To Conclude A Sale Successfully
A Sales Person Must Sell In All Types Of The Business Community: Investors, Employees, Business Partners and Customers.
Last But Not Least, Some Successful Founders, Such As Sara Blakely, Have Built Billion-dollars Companies By Selling Directly Before Directly Marketing Their Products/Services.
7. Track Your Business Numbers
Emotional Responses Alone Will Not Contribute To Business Growth — Analytics/Statistics Will Help A Company Grow.
You Must Know Your Business Numbers:
- Customer Acquisition Cost (CAC)
- Life Time Value (LTV)
- Profit Margin
- Conversion Rate
- Monthly Business Expenses
- Cash Runway
If You Don’t Have Access TO OR Have No Understanding Of Your Numbers, You Will That You Are Taking A Guessing Approach To Running A Business.
Many Successful Entrepreneurs Trust Their Business In A ‘Business Dashboard’ As Oppose To A Diary.
8. Learn To Be Consistent As Opposed To Being Motivated
While Your Level Of Motivation At Times Will Help You Achieve Your Goals, Your Level Of Discipline Will Definitely Impact Your Company’s Success Rate.
Many Businesses Go Out of Business Because Of The Lack of Consistency By The Founders.
Practice Creating Consistency:
- Daily Activities to ‘Reach Out’ to New Customers
- Weekly Activities to Review What You Did to Reach Out
- Monthly Activities to Improve What You Did the Previous Month
- Quarterly Activities to Develop Strategy of What You Will Do (What Resources You Will Need) For The Next 3 Months
Completing Small Daily Tasks Will Outperform Completing Rarely Occurred Large Tasks.
9. Create a Community Before You Expand Your Business
The present age of writing is rewarded by way of popularity by other writers.
When people have faith in you, they’re more likely to purchase from you. If no one has heard of you, you’re going to spend a lot of money on marketing.
Start providing knowledge to your audience via:
- Articles
- Short Videos
- Teaching in Your Space
- Solving Individual Problems Publicly
People follow value before they follow a company.
Many modern businesses have developed because they built up someone else’s credibility first, then they used it to be successful.
10. Bring on Employee Slowly but Eliminate Them Quickly but with Respect
Your team will determine the overall culture of your organisation; therefore, the type of employees you hire is an important aspect of establishing the culture.
Hiring the wrong person is more expensive than delaying hiring for the right person.
Some characteristics to show in candidates:
- Accountability
- Ability to Learn
- Ownership of Their Work
- Communication
While skills can be taught to individuals, their attitude usually can not be taught to them.
If a candidate continually hinders progress despite being provided assistance and clarity, then you should dismiss them from your team in a fair manner and promptly.
11. Understand that You Will Have Failure; And, Use your Failures to Your Advantage
No successful entrepreneur has achieved their goal without experiencing several failures.
Even successful individuals such as Elon Musk faced bankruptcy before achieving a breakthrough moment.
Failure and success are not mutually exclusive; they can be used together to assist in learning.
After every failure, ask yourself;
- What incorrect assumption did I have?
- What signals did I miss?
- What was my process for failing?
- What should I test the next time?
Detach Your Ego from Learning; Attach Learning to You.
12. Manage Your Energy Instead of Just Your Time
Being an entrepreneur is mentally taxing.
The number of new venture failures exceeds all others primarily due to burnout.
Safeguard Your Ability to Make Decisions:
- Get Enough Sleep.
- Exercise Daily.
- Take Time for Reflection.
- Limit the Number of Notifications You Receive.
A fatigued entrepreneur generally makes costly purchases with poor judgement.
You need to recognize that the brain is an important business resource — treat it like a utility.
13. Set Prices Based on Sustainable Pricing Methods Rather Than Popular Pricing Models
Pricing items too low will cause a business to fail.
New entrepreneurs often price their products below costs to attract customers; however, they soon realise that pricing items below cost attracts many high-maintenance customers, and ultimately add unnecessary financial pressure to their business operations.
Instead, create your pricing based on:
- Value of what you deliver
- Alternative items in the marketplace
- Cost to provide service to a customer
- Desired growth profitability.
Businesses that charge less than true value struggle; businesses that charge true value grow.
14. Be More Adaptive than Your Competitors
Competitors are changing rapidly; this is especially true in the online space.
Being smarter than your competition is not always the key to being successful; being able to adapt quickly will give you an edge over your competitors.
Periodically assess:
- How your customers are changing their purchasing behaviour?
- How technology is affecting the way people research and purchase?
- Are there new competitors just starting out to replace current ones?
- What is the change in the economy as it relates to your market?
The rigidity of a new business will kill it. The flexibility to redesign and change with the market will keep it alive.
15. Plan Ahead From The Beginning
Quick cash thinking creates short-lived businesses.
Create a trust-based marketing system:
- Honest marketing
- Dependable services
- Quality consistently
- Building strong relationships
Once you’ve gained customers’ trust, they are more likely to buy again and help you build stability in your business.
Concluding Thoughts
Entrepreneurs do not become successful overnight, become well-known overnight, or achieve wealth overnight. Entrepreneurship is a long-term endeavor that requires a lot of work to solve problems, learn, and be disciplined.
If you remember a few things, remember the following:
- Solve problems for real
- Validate
- Focus on making money
- Keep track of everything
- Be consistent
- Learn from mistakes
- Earn trust
Many times, businesses fail not due to one major miscalculation, but due to many little, tiny, and insignificant lessons being overlooked.
If you practice these principles consistently, not only will your business be established, but it will be sustained.
Becoming an entrepreneur is not about having the best idea possible.
