Speaking broadly, an entrepreneur is someone who identifies a need in the market and attempts to fill it. Naturally, this isn’t always the case as the world doesn’t really need another burger joint, but guess what? A new one just opened up somewhere in this fine country of ours as I wrote this. Regardless of whether a need has truly been identified, or you are simply improving on a product that already exists, starting your own business will be difficult with no guarantee of success -- regardless of how well you may plan ahead.
Moreover, the world wide web is rife with tales of both business failures and successes, as well as tips, tricks, and hints to avoid any worst-case scenario you can imagine. Unfortunately, most of this advice tends to be general and vague, and therefore not helpful to the people who could use it the most. For example, everyone knows they should “understand their market,” but not everyone knows how to go about doing so.
The common belief that more than half of new businesses fail within the first year is somewhat inaccurate. In fact, according to the Small Business Association, it takes five years before half of all new businesses fail. That number jumps to a whopping 66% within the first 10 years. In other words, the longer your business is up and running, the greater the chance of failure. Businesses fold for a myriad of reasons, so don’t let any particular statistic discourage you from pursuing something you feel strongly about. Rather, use this as motivation to learn as much as you can from those who have been where you want to go; as much can be gleaned from tales of woe as by reports of triumph. To borrow a line for seminal mid 80s cartoon G.I. Joe, “knowing is half the battle”.
How Does Your Idea Fit into the Current Marketplace?
Since we specifically asked this question above, it stands to reason as the best place to start. Taking the time to put together a business plan without understanding your market will make it very difficult to be successful in adequately addressing the needs of your target customers.
According to Louis Foreman, CEO of Edison Nation: “while conducting research to understand potential market size, you will likely learn valuable lessons about the characteristics of your target demographic. Even seemingly minor data such as spending habits, aesthetic preferences, and trend studies, along with price elasticity can alter the trajectory of development, patenting and marketing. Understanding the nuances of your product's potential market is key to the survival and success of your product.”
Plan and Plan and then Plan Some More
Once you’ve taken the time to study your market, it will be easier to put together a solid business plan. Whether or not you plan on presenting your vision to potential investors, having your idea laid out in a clear and concise format - backed up with current, relevant data - will help keep you on track and better able to adapt to any potential shifts in demographics.
“Writing out your business plan forces you to review everything at once: your value proposition, marketing assumptions, operations plan, financial plan, and staffing plan,” says productivity and venture coach, Stever Robbins. “You'll end up spotting connections you otherwise would have missed.”
Let’s Get Real
Anyone involved in business, at any level, is familiar with the importance of managing expectations. From the expectations of your customers to your direct reports, to even those above you in the chain of command, proper expectations are important. Managing your own expectations is no different. Goals are good, targeting a specific share of the market is great, but only if the expectations you set are realistic.
Setting expectations that are too broad in scope or goals that are too aggressive only set you up for failure. “Expectations impact attitudes and mindset.” Chad Carden, author of Winning the Money Game points out. “If we meet or exceed someone’s expectations (ours included), we tend to have positive attitudes and mindset. The reverse is also true: If we don’t meet expectations, we tend to have a less-than-stellar attitude or mindset.”
All About the Benjamins
It goes without saying that most businesses will experience the pains of financial difficulty at some point or another. Whether it be keeping accurate payroll, remaining in good standing with potential suppliers, or just simply keeping the lights on, expenses can quickly add stress which could sink a startup before it gets a chance to thrive.
Preparing for this eventuality will help you navigate these inherently choppy waters without going under. Jonathan Long, Founder of Uber Brands, puts it thusly “you never know what can happen when starting a business, so it is best to prepare yourself for the worst possible situation. Don’t quit your job and eliminate your main source of income until your business can replace that income.”
Why You Should Ask for Help
Though it may be true that failure is a great teacher, this does not mean it should be openly invited to your business venture. Experiencing growing pains is nothing new for a burgeoning entrepreneur, and as such, there is nothing wrong with reaching out for assistance along the way.
Moreover, it can be a great way to get the word out, says Sujan Patel, co-founder of Web Profits: “Asking for help can make it a lot easier to boost brand awareness and build up your own reputation among other entrepreneurs—which is especially essential if you’re new to entrepreneurship or new to a particular industry.”
Since many businesses share the same shopping space, bounce-back promotions and other forms of strategic marketing can be mutually beneficial for all parties involved.
The Student Can Only Become the Teacher if There is a Teacher
Many who have succeeded in business have had a mentor for guidance. While the desire to succeed on your own is understandable, it can be downright silly when you stop to consider all the people whose businesses have beaten the odds thanks to a sage mentor at their side.
“A mentor who has experienced the highs and lows of running a business is in the perfect position to give positive and soothing words of advice to you when things refuse to go your way. And not only do they have the right words to share, but they would also have ideas to help you navigate your way to success” notes founder and CEO of Media Mentions, Sheila Eugenio.
Don’t Hate, Innovate
As succinctly put by Gordon Tredgold, Founder and CEO of Leadership Principles, “Customer needs are constantly changing. One day, your customers might need exactly what you have to offer, and the next day, they might need something else.”
In other words, customers are fickle. Their needs, likes, and desires fluctuate accordingly. Being able to quickly spot these changes in the marketplace is vital to the life of any business, large or small. This is where understanding the importance of social media can be crucial.
Social Media and You
No matter where people may go, there they are. This is especially true when it comes to social media, like those from all walks of life are constantly checking in, tagging, and sharing their experiences both positive and negative. Understanding what drives people and how to motivate them to spread the word about your expanding business is a powerful yet cheap and easy way to market yourself.
As explained by Deborah Sweeney, CEO of MyCorporation.com, the benefits go beyond a simple marketing strategy. “The real-time advantages to social platforms allows your business to engage with your customers in a timely manner,” she explains. “You don’t have to be on every platform, but it’s helpful to have a few active accounts where you know your customers can be found.”
Having the ability to immediately address your customers comments and concerns is priceless.
Never Stop Learning
Running a successful small business can seem dynamic at the outset, but you may quickly find that many of the same tactics that led your operation into the black need to be repeated. Thinking you know everything there is to know or getting complacent can be a very poor attitude in general, but it can be the difference between success and failure when it comes to the viability of your venture.
“Look at any top business leader, and you will see they will be quite open about any lack of knowledge they have,” states Mohit Tater, co-founder and editor of Entrepreneurship Life. “Pretending to know something when you don’t will lead you into a far more complicated and stressful situation, as you try to cope with a process you haven’t mastered.”
Did We Mention Planning?
While writing a business plan at the outset provides an important roadmap to achieve your goals, this plan need not remain static. Rather, blindly following a set strategy in the face of an ever-changing environment can be to the detriment of your entire operation.
“You have to realize your business plan is wrong. All business plans are wrong. Plans are about the future--and nobody gets the future right very often, so keep the plan fresh and watch closely as reality moves forward,” according to business planner Tim Berry.
To accurately gauge the success of your business plan and adjust according to the current marketplace requires being able to track business performance.
Indicators of Performance are Key
KPIs, or Key Performance Indicators, are called such for obvious reasons. Whether you’re selling clothes, dreaming up a pizzeria complete with self-aware animatronics, or anything in-between, being able to paint a clear picture as to where you’re at gives you a better understanding on what adjustments you will need to make in the short term.
CEO of GrowBiz Media, Rieva Lesonsky, sums it up nicely: “Every small business owner needs to track key performance indicators on an ongoing basis. Without tracking your business’s performance, how will you know whether your business is improving or just treading water?”
Channeling Clark Griswold
Starting and running your own business is easily one of the most stressful times in the life of a young entrepreneur. Financial concerns, staffing snafus, relationship issues of both the professional and personal variety abound, and this just scratches the surface of a very large iceberg. Unforeseen problems can present themselves at a moment’s notice.
According to health and lifestyle journalist Lisa Evans, taking some much needed time away provides some expected and not-so-expected benefits: “Stepping away from your business and your normal daily routine is like giving your body and brain a reboot, allowing you to return to the business refreshed and with a renewed energy and focus,” she says, while adding, “Entrepreneurs often have to wear a lot of different hats, but as the business starts to grow, they have to start outsourcing and delegating some of those responsibilities. Taking a break is a great way to see how the business can operate without you. Do the people on your team have what it takes to keep the business running in your absence?”
It’s important to factor in the current state of your business and expected time away, but stepping out to take the family on a nationwide jaunt can serve as much needed time away.
When it comes to being an entrepreneur, it can be a bit tricky to determine what steps to take in exactly what order. This is because there isn’t an easy-to-follow, one-size-fits-all roadmap to success. If there were, everyone would be doing it. Growing a successful small business requires time, patience, and an eye for innovation while maintaining realistic expectations.
In all likelihood, you won’t be swimming in pools of money as soon as you would like, so it’s important to be able to pivot quickly according to the current environment. Being as prepared for any and every eventuality is the best way to set yourself, and your business, up for success.