The first thing you need to keep in mind before starting your own business is the fact that it’s definitely not going to be easy. However, knowing that there are challenges and knowing what these challenges are, let alone how to face them, is a completely different thing. With that in mind and without further ado, here are the top eight things you need to know before starting your own business. Abiding by these tasks may drastically improve your odds in the business world.
1. Figure out keys to success
The first thing you need to achieve before starting your own business is that you need to figure out the keys to success. What this means is that you have to understand exactly what is it that needs to happen for you to make it. In other words, this is the opposite of coming up with a contingency plan.
Here, you need to come up with the best-case scenario. What would it look like if everything went according to plan? Then, do your best to make this work.
2. Check risk factors
The next thing you need to understand is the fact that business fails for all sorts of reasons. Still, some are more common than others. Lack of market needs, lack of funding, poor marketing, bad team, etc. are just some of the things that could ruin your business before it has a decent start.
Fortunately, you can do research on the minimum requirements necessary for you to pass all of these requirements. If not, your enterprise might be doomed to failure from the very start (unless you come up with something new).
3. Focus on retaining customers
One more thing you should keep in mind is the fact that a lot of businesses make a mistake of focusing on return customers. The problem with this issue lies in the fact that it costs you five times less to retain an old customer than to attract a new one.
If someone has bought from you once and had a positive experience, there’s a 27 percent chance that they’ll return for a second purchase. After a second purchase, this figure rises to 45 percent.
This results in the fact that only 8 percent of your regulars can make up for about 40 percent of your entire profit.
4. Write a business plan
No matter how clear things may seem in your head at the moment, there’s always a risk that you’ll forget about something crucial. It’s the execution, not the planning stage that will determine the success rate of your business and this is something that you always have to bear in mind.
Also, remember that writing a business plan isn’t as simple as scrambling your idea onto a piece of paper or a word document. You need to have an executive summary, a business structure, and defined ownership, as well as much, much more.
5. Delegate tasks
Never-ever, try to do everything on your own. First of all, this will limit the potential of your employees and, therefore, limit the potential of your enterprise as a whole.
Second, it will diminish morale, seeing as how your employees will feel as if you do not trust them.
Third, it will completely burn you out. Lastly, it will make you undertake tasks that you’re ill-equipped to handle. Instead, you can either delegate these tasks or outsource them.
For instance, highly-sophisticated financial tasks like tax depreciation report are not something that you can efficiently handle on your own, so why not outsource it. Either of these ways can handle so many problems. At the end of the day, why not make things easier for yourself?
6. Prepare for sacrifice
The life of an entrepreneur is full of sacrifice. This is something you need to be prepared for. You’ll be the first one to arrive at the workplace and the last one to leave.
Also, you’ll be the one carrying all the responsibility for a potential success or failure, which is a huge burden that you won’t be able to leave at work.
Your friends, family and even your own mental health will suffer because of the stressful life that you’ll lead. The key lies in keeping this to a minimum.
7. Prepare for the unexpected
You can’t plan out everything, which is why you always need to have a contingency plan. When raising funds, don’t just raise enough to cover the launch costs. Keep enough money to cover operational costs and make up for a potential loss of profit due to unexpected downtime.
Also, understand that your business won’t be self-sustainable from day one. It will take a while for your business to live up to its full potential.
On average, for a business to start being profitable it may take between 6 months and two full years.
8. Personal brand matters
As a new business, you won’t have much in terms of previous work portfolio. This is why personal brand matters more than you may think. What if you have previous work experience in the industry? What if you’ve worked for prestigious companies or participated in major projects?
All of this is something that could testify about your skill and experience in the field. In a way, your own professional history can make up for the fact that your business doesn’t really have one.
Your LinkedIn page is a great place where you can show this but there also an option of starting your own blog.
The last thing you need to hear is the fact that you shouldn’t get demoralized by failure. Even if your first enterprise ends up in a disaster, there are not a lot of people who make it in the business world on their first try.
Also, keep in mind that, there are some people who get demoralized even when faced with smaller problems.
Succeeding in the business world was never supposed to be easy and, if this is something that you’re not prepared to face, head-on, you shouldn’t even try.
Alex is fascinated with “understanding” people. It’s actually what drives everything he does. He believes in a thoughtful exploration of how you shape your thoughts, experience of the world.