Owning a business is exciting and stressful at the same time. Being “your own boss” gives a person the opportunity to create the lifestyle that wouldn’t otherwise be available when working for someone else. However, it also comes with a cost and responsibility. Unfortunately, 9 out of 10 businesses fail within their first 2 years according to the Department of Labor. There are numerous reasons why a business doesn’t succeed. So, it is beneficial to take the time to understand the fundamentals to having a successful business.
Whether you’re about to start a business, or you are in the early stages of a start up business, below are 5 of the most important things that I believe a new business owner needs to know (and do) in order to minimize becoming a statistic.
#1 – An entrepreneur must always be open to changing from the antiquated ‘business as usual’
The world is rapidly changing. New ideas and technologies are being birthed every minute. People are connecting from across the globe at the speed of light. There is an increasing demand for the desire to make a greater contribution and to live a better lifestyle that supports people’s values while preserving the planet’s resources. Which means that we are in an era where what was once considered ‘business as usual’ is no longer meeting the needs of a business and society.
Remember the fax machine? That’s been replaced with the cloud and file sharing. I trust you are already knew that. However, the Millennials might wonder what is a fax machine!
What worked 20 years ago in business is no longer efficient today. What worked last month could also be ineffective today, and what is being done today is already in line for replacement by something better tomorrow.
Think about that last statement for a moment. If you stay stuck in doing things the same, you will only make things harder on yourself – or worse, it will hurt your business and risk becoming obsolete. I encourage you to learn new ways of doing business so that it matches with the needs of your market. It might be in the form of brushing up on your business skills, better marketing methods, or incorporating advanced technological tools. There are so many resources and tools available these days that can make your business run more efficiently and give you a higher profit margin. Observing what other successful businesses do will give you insight as to what changes to make in yours – but never copy others – be unique so that you stand out from your competitors.
To really be ahead of the curve, ideally it is a good idea to rebrand and reinvent your business regularly so that you stay ahead of your competition and to corner a market niche that no one else dominates. Notice how Gillette razors comes out with a new product every couple of years? Each one claiming to be the ‘best ever?’ This company is not only a great example of staying ahead of their competition, but they also take it a step further by beating some of their own products. In other words, they are competing with themselves to keep things fresh and new, so as to continually stir up ongoing business and profit. This is a brilliant branding strategy in my opinion.
It is advantageous for you to keep abreast with the trends in your industry and adjust as needed to appear fresh and new in your target market’s eyes.
Right now you may be arguing against this point. Because some people like ‘old fashioned’ or ‘traditional’ products and services. And I would say yes, this is also correct. It is true in the sense that some things are better left untouched and unadulterated so that it doesn’t lose it’s face value or nostalgic value. The brand can be and could be perceived more valuable and likely sold at a higher premium when it is labeled ‘old fashioned’ and the product or service itself is harder to come by, meaning that there isn’t as many to sell on the market which raises its value because people are more like to buy things that are rare, or none of their friends have. This is called the scarcity and exclusivity strategy in marketing. However, this is a whole other topic that I won’t dive into at this moment (perhaps I’ll write another blog entry in the near future!). But the point here, is that If you want to thrive, then take a close look at the way you do things in your business and consider how you can do things better, faster, and more efficiently. Be willing to change so that your business yields better revenue and to serve a bigger market more effectively.
Learn to be flexible and go with the wave of change, staying far away from antiquated ways of doing business.
#2 – Having a successful business requires commitment and persistence
In my opinion there are numerous reasons why a business fails. Allow me to explore one of them. One very big one is because they are unwilling to stick through when the going gets tough – and that falls under commitment. Now, I get that sometimes it makes more sense to abort a project or a business idea when – only after – you’ve done a thorough assessment to determine the sustainability of an idea or product no longer fits within the marketplace. But in some cases it isn’t that the business idea or the product is not good, it is because there is a lack of commitment to follow through and be persistent about sticking to the vision of the founder or company.
The founder of a company is responsible for holding the vision in place and inspiring others to believe in the vision. And so it is good to bring together a team of advisors, business partners, and investors who share the same vision. If the founder discovers that a team member doesn’t share or believe in the same vision, then it behooves the founder to seriously consider that relationship and possibly replace the person with someone who does. This also applies to the hired workers within the company that get excited and feel great passion to come to work every day. If a founder isn’t very excited about the vision or passionate about the company, well…then you have another problem.
If you’re not passionate about what you’re doing, you will lack the desire, commitment and needed persistence that will carry you through when you hit bumps on the road.
You must be passionate about what you are doing if you want to succeed. Your passion is what fuels your commitment to operate at a higher level so that you don’t give up on your dream. Your passion is also felt by your team, your employees and the market you serve. They become more inspired by your energy and enthused to give their best to the overall success of the company.
If you’re lacking commitment or persistence, here are some questions to stir up what you drives you to do what you do in the first place:
- Why did you start the business in the first place?
- What drives you to do it?
- What motivates you and makes you passionate in life?
- If you had unlimited resources and money was not an object, what do you envision to have happen when the business is doing well? In other words, if the business is successful, how do you imagine your life to really look like? (Be free to dream here and not let doubts or fears get in the way of this question)
- And if it’s not necessarily the business concept or product that’s what’s driving you or makes you passionate, what will you gain out of having the business work? What will be the by-product as a result?
I encourage you to take thoughtful time in answering these questions by writing them by hand and not by computer or typing. This process of connection between the brain and the hand is very powerful to shed some light to these questions, and hopefully bring some clarity for you.
#3 – Expect challenges that inevitably come with entrepreneurship – so plan for worse case scenario
Some people are born entrepreneurs who love the game, and other entrepreneurs develop the skill over time. In either case, it’s exciting to start a new business. However, it is also equally likely that a budding entrepreneur will be so excited that they will look through rose-colored goggles and not take into account the worse case scenario. To avoid this from happening, it behooves you to take the time to lay the right foundation in the beginning and be realistic about your plans. By taking time to have a clear plan and a solid business strategy to follow, you will minimize the amount of mistakes along the way, be more on target with your end goal sooner, and reduce unnecessary costs and headaches.
On the flip side, as much as you plan ahead, there can be unforeseeable variables. For example it could be in the form of a shift in the market demand, a new industry law, or global economic changes that can have an impact on your business. Or you may find that you may need more capital than what was originally predicted to get the business off the ground and into profit stage due to some unexpected and yet necessary expenses. So expect that there are going to be challenges. Whether you are bootstrapping or you have a venture capitalist backing your project, the initial strategy plan is where you determine the timeline for your exit strategy and how much initial funding will be anticipated. Also be realistic when calculating your budget. The last thing you want is to fall short and run out of funds before you’re in the profit stage!
One very important point:
Take into account your own personal living expenses when calculating your budget until your business is in profit stage to sustain you. If you’re worried about how you’re going to pay the next mortgage or car payment while you build your business, you won’t be effective at working on your business because your energy will be pulled into two different directions. Having a solid strategy in place will help to avoid this costly mistake, and a trained business coach will work with you on making sure you are set up for success in this area so that all your needs are met.
#4 – An entrepreneur must always be diving into personal development
Successful people understand the value in investing in themselves so that they’re not getting in their own way and in the way of what’s possible for their business. A business owner that invests in high level personal coaching, personal growth workshops and business training seminars will reap the benefits far greater than the amount of its initial investment on coaching. In addition to improving your business acumen, remember that improving your mindset is just as, if not, more important than acquiring business skills – because you can hire experts to fill the roles of where you are missing the talent.
There is a direct correlation between the mindset of the individual leading the company and the overall success of the business.
Let me give you an example using a case study:
Mr. New Business Owner, my client, (let’s call him Joe to protect his privacy) is about to start a business. Joe is very excited about his new invention and he believes it is going to change the world for the better. He just quit his job of 20 years so that he can focus solely on his new business. He truly wants to provide a better quality of life for himself and his family and he believes he can do that. He officially started his business using some of his retirement income. He gets the product manufactured and hires sales people to sell the product. Joe soon discovers that his sales team is not able to sell a lot of his products. In the meantime, Joe’s business expenses continue to pile up. He begins to get frustrated and feels that the sales team is not doing a good job. He decides to have a meeting with them to discuss better ways to sell the product. In Joe’s mind he feels the meeting went well.
A week goes by and still the sales volumes are low. In fact, it worsened from the previous weeks’ sales numbers. Joe becomes worried and restless. He calls for another sales meeting. This time Joe raises his voice and becomes angry toward the sales team feeling that they could be doing a better job, which causes some of the sales team to quit soon after the meeting ends.
He talked to some of his friends and family members about his dilemma. And his friends and family unfortunately are not familiar or experienced in business, but what they do know is that Joe is an impatient person and has a pattern of not being an effective communicator. Being afraid of how Joe would take this information in a negative way, they avoid telling him that he lacks the leadership skills to inspire others.
Joe finds himself ruminating daily over how people don’t listen to him and that they are incompetent. He decides that in order to succeed, he must do things himself because nobody else can do it better than he can. He fires his sales team and begins to sell his own product. With some success he is earning a moderate income (not the amount that he really was hoping), and he finds himself stuck doing all the work – working more than the typical 40 hour work week that he originally had in his day job – and ultimately Joe becomes resentful that he’s not able to live the lifestyle that he was dreaming when he first decided to start the path of entrepreneurship. Which has an impact on his quality of life and his original plan to create a better life for his family.
If Joe decides to get out of his own way to work on his leadership skills, imagine what he can do to help himself, his family, and the people he serves. Thankfully, Joe chose to receive valuable coaching and the proper resources to improve on his leadership skills and build his business around his lifestyle goals.
This is just one example. Personal development is not just beneficial…it is crucial to the success of the long-term sustainability of what the business can do for the individual and for the lives of others.
#5 – Partner with a professional business coach to work on your long-term goals
Some of the benefits of having the support of a highly trained and experienced business coach include shortening the amount of time it takes to achieve a certain outcome. ROI is also achieved by finding better solutions to the basic challenges that a business owner faces, which will ultimately result into higher profits for the client. The other benefit of having a professional business coach is to co-create with the client to form a clear strategy that will detail how they will achieve the bigger business goals.
There are a lot of different types of business coaches. Seek out one that you feel comfortable with and is expertly trained to coach you past your fears and stops in addition to having real-life experience and knowledge about business. Find a coach that also has experience with understanding the complex stages that the business will evolve into. A business coach who has already been down that road of entrepreneurship themselves can properly steer a budding entrepreneur toward the right direction. They also help reduce mistakes that the business owner can make versus doing it alone. They will have the skills to guide you through whatever stage you are in your business and support you to get clear on your long-term goals from start up to exit strategy.
In conclusion the idea of working like most people won’t so that they spend the rest of their life living like most people dream is worth the payoff to those that follow the entrepreneurial path. A new business owner will undoubtedly reap the rewards when they learn to navigate through challenges more effectively and hopefully with more ease by following the steps outlined above.
I’d love to hear from you on what you believe is an important thing to know as a startup. What have you learned along your journey that you’ve found to be valuable? Shoot me a message!