Starting your own business can be incredibly rewarding, but without the right preparation, your business is at risk of failing. Check out these eight must-dos before you even think about becoming an entrepreneur.
Find Your Niche
Before you can start your own business, you first need to have an idea. When you’re in this brainstorming phase, start with thinking about your interests and passions, rather than potential earnings alone. What do you like to do? What are you good at? If it helps, sit down and write out your talents; this is the time to brag, so don’t be shy. From there, try thinking of one or two job ideas that complement your unique skillset.
Another tactic to try is niche problem-solving. Think about the list of talents and interests you’ve written down. What are the hurdles in these industries? What are the problems – what do people find most annoying? And how could you be the one to simplify their lives?
You also need to think about the competition. Yes, even before getting funding and building up a client list, you need to see what’s currently out there. If your new business is selling a product that already exists and is being sold by countless other companies, it may be difficult to shoulder your way into the market. When prepping your idea, think about the ways you could stand out from the competition, whether that’s through technology, service, marketing tactics, cheaper goods/services or convenience.
Good habits should be your bread and butter as a new entrepreneur. While you may be looking for the perfect habit structure to make the biggest impact on your life, the truth is that there are a wide variety of habit tactics that successful entrepreneurs use. While Ben Franklin focused on time habits – breaking down his day into segments to meet his agenda – people like Warren Buffett pursue knowledge habits – such as reading 600 – 1,000 pages a day. And Mark Zuckerberg wears the same clothes to work every day, which he believes allows him to focus his mental energy on more important tasks throughout the week.
The point is that there’s no one-size-fits-all method for goal-setting. But these brainiacs and billionaires have one thing in common: They stick to their habits. So whether that means getting up at 4:30 a.m. for a morning run before work or staying up late each night to hit your goals, just do something and stick to it. Once you’re consistent in your discipline, your goals will be within your reach.
One method for building good habits, made popular by the comedian Jerry Seinfeld, is to create a large calendar on your wall that has a specific habit attached to it (ideally something that involves your industry). Each day you successfully complete your habit – whatever it may be – you draw a big red X on it, allowing you to see that you’ve succeeded. You start with one X on the first day and then add another X each day that you complete the task. The point is to go as long as you can without breaking the chain of red X’s. Seeing your days accumulate will encourage you to keep going – even when you don’t feel like it.
Learn from the Experts
One of the biggest mistakes new entrepreneurs make is trying to get started without the help of experts. Get that “I’m an island” mentality out of your head, and consider the wealth of knowledge you have at your fingertips.
A good place to start is with your future competitors. Once you’ve identified your competition, reach out to them and ask for advice on getting started in the industry. This will take some guts, but it’s good for you and has some amazing benefits. Ask about their business, about their challenges when getting started – ask about their successes and their failures. Most of the time, people enjoy talking about what they’ve done or accomplished, and you’ll be surprised by how many will talk to you. You’ll also gain a contact who could potentially help you down the line.
Or, if you really want to get the inside scoop, get a job with one of them. Learn the lay of the land before setting out on your own.
Worst case scenario: No one wants to share their trade secrets and no one’s hiring. Start speaking with shoulder niches. A shoulder niche is an industry that touches the industry you want to go in.
For instance, let’s say you want to sell those little cocktail umbrellas that go in summertime drinks. I know, it may sound silly, but if there was ever a niche, the little drink umbrella market is surely one of them. Find out what companies are buying this product or selling summertime beverages. Talk to managers at hotels along the Caribbean. Find companies that sell other drink accessories. Get to know what they want.
While it may sound strange, these types of conversations will help you better understand how your product/service is used. It’s also a good way to find future customers.
Make a Plan
Starting a business without a plan will be a catastrophe sooner or later. You might get by on dumb luck if you’re incredibly gifted or you’ve hit a niche at just the right place or time, but in the long run, those with a plan are the ones who have the best chance of succeeding.
Start with a business plan, which will allow you to look at your ideas, your next steps, investment opportunities, etc. Spend some time working on this, as the more work you do upfront, the better results you’ll get.
Goals are a large part of this planning session. It’s important to have large goals, such as revenue objectives for the year, but it’s also important to hit small goals, like registering your business.
Find a Team
For many new entrepreneurs, one of the toughest skills to master is delegation. Starting a business can feel like raising a child, and it can be challenging to give up that control and responsibility to someone else. But one of the most effective ways to grow your company is by adding employees.
When hiring your first employees, start by looking at the needs of the business, as well as your own strengths and weaknesses. Let’s say that, for your small business, you own investment properties and rent them out to tenants. However, you’ve discovered that you’re not great at talking on the phone, which is a primary skill needed to interact with your tenants. In this case, hiring an assistant to field calls and schedule appointments for maintenance could be an excellent use of your time and resources. Look at employees as a way to fill in the gaps of your own skillset.
You also need to consider the costs hiring an employee – including the wages, benefit packages, perks, training – and then weigh that against the benefits, such as revenue for the company or time savings.
Even if your startup doesn’t require a lot of hands-on labor, you still may need someone to do your taxes, marketing, spreadsheets and any of the other tasks in your specific industry. Freelancers can be the perfect way to get small jobs completed, especially when you’re just getting started. While you may not need a full-time designer, you might still need design services a few times a month. Try services like Upwork or Fiverr for this type of assistance.
Determine Startup Costs
In most cases, you’ll need to have initial funds to get your business off the ground. When you’re first starting off, one of the best ways to acquire funds is through a personal loan, which has a lower interest rate than a credit card. Once your business is a little more established, you can also begin researching small business loans.
But what does it actually cost to start a business of your own? It’s usually going to depend on the industry, so start with this handy startup calculator to determine things like costs for website design, legal assistance and payroll.
Build a Small Client Base
Rome wasn’t built in a day, and the same is true about a business. When first launching your startup, focus on getting a few clients to create some momentum. In most cases, it makes sense to reach out to the people you already have connections with – such as family, friends, work connections or people from your community. These initial clients will help you learn more about your business and your process, as well as give you a small revenue stream to grow.
From there, you can start building your small business, whether that’s through traditional marketing tactics or through social and web-based traffic. No matter your business, it’s important that you build an email list, which will allow you to reactivate clients who had previously purchased goods or services from you. When you’re first starting out, this doesn’t have to be extravagant or expensive. A simple MailChimp or Constant Contact account will allow you to reach out to these audiences in an affordable way.
Adopt the Right Attitude
When you’re first starting a business, your attitude is everything. No journey is without roadblocks, and entrepreneurs – even the great ones – have been known to come across hurdle after hurdle after hurdle. If you really want this to work, it needs to be something that you can come back to, each and every day, even when things get tough.
To be an entrepreneur, you need to have a passion that will withstand the test of failure and fear. But passion alone isn’t going to keep you on track. A successful business is a marathon, not a sprint. You also need to follow your goals and set rewards – such as some extra time to relax and recoup – along the way. And while stress comes with the territory, you should have coping mechanisms to help manage stress. Some coping mechanisms include focusing on what you can control right now, thinking about things you are grateful for or even mediating on a regular basis. Your attitude will affect all aspects of your life, but it’s especially true for your entrepreneurial pursuits.
So are you ready to be an entrepreneur? These tips may seem easy at a glance, but they could take some time to master. Owning and operating a business is tough, so start your journey with a solid foundation.
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