What you need to know before becoming an entrepreneur
This article covers some of the key things you need to know before starting your own business. The list is endless but here is a few selected key factors to succeeding as an entrepreneur.
According to a study made by Harvard Business School, 50 out of 100 startups backed by venture capital fail in their first five years. This number reaches 70 after their first decade. This is a high number but there is a reason for that: Keeping a new business afloat is not easy. It is not enough to just have an exciting idea, a strong determination to make it real, a convincing and organized business plan, and some money to begin with. There are some extra factors needed if you want your company to overcome all the challenges naturally present in your competitive environment.
This article will address some of the most important aspects you should acknowledge and adopt in order to increase the chances of success of your new business, regardless of its size, sector or the resources you have around.
Be surrounded by the best people
There is a particularly common aspect present in many startups and is that most entrepreneurs and emerging CEO’S have absolutely no idea on how to run a company. This is very understandable because you can’t really prepare for it before you are in it.
The good news though is that you don’t have to be an expert on finance, revenue models, marketing or sales. You are the best on what you do. Period. For this reason, experts advise you to have the best staff you can in the key positions of your company for the first stages of your startup.
Investing in them over some other potential startup costs you will face in the beginning. The value of knowledge is one valuable asset, that you will need to compensate the lacks you might have yourself. Make an effort to understand what they do and how it adds up to the growth of your business. At first, micro-management is key: Get involved in their plans, decisions, and everyday tasks, so you can obtain a better understanding of where your company is going. However, never lose sight on doing what you do best.
Understand the meaning of Cost of Opportunity
So, you are planning to create a startup? That’s great! However, you should be aware of everything that involves, including what you would have to sacrifice. That is a strong and often negative word. I prefer the term Cost of Opportunity and having a startup has a very high one: long hours in the office for development, studying budgets, designing your marketing strategy, planning events, having financial meetings, scheduling appointments with potential clients and investors etc.
This might seem incredibly overwhelming at first, but as soon as you get comfortable with the idea of how much time and money you will have to invest as the cost of opportunity, the better. Some people might find relief in thinking that it’s temporary and with fast results just waiting around the corner. However, they often get deceptive when they see they won’t catch a break in the near future, losing interest, stamina and resolution to make their project a reality. The solution is pretty simple: Acknowledge the fact that you will eventually catch a break, just don’t spend a lot thinking about it. The whole point resides in knowing you will have to work a lot.
It doesn’t have to be a stressful experience… all the time, enjoy the ride!
In order to ensure the success of your company you will need to spend some major time and resources. The best thing you can do at this point is to enjoy every second of it as part of the construction of your persona as an entrepreneur. All the knowledge and skills you will get in the first years of your company are incredibly valuable.
Don’t let the idea of the final goal cloud the vision of what you have now. This is something particularly important especially knowing that the way you experience your ride will have an effect on the image you project as a leader amongst your collaborators. They will be inspired and will follow you depending on how they perceive your faith and enthusiasm. Have fun with what you do and you will bring the best out from them.
Balance Book Smarts with Street Smarts
There are extremely rare cases when people succeed relying exclusively on instincts or just by numbers. It is said that Steve Jobs didn’t like to trust market research and he often based the design and functionalities of most of his solutions solely on what he believed would work. However, he is Steve Jobs, in theory, he could afford to do it (this didn’t always work out for him though).
Instead of making your everyday decisions based on pure instinct or just on reports and statistics, find a middle ground to converge both concepts, and extend the same approach for every area of your company as possible. Knowing there are certain aspects that can’t be negotiated (you can’t run financial matters relying on just a hunch). At this point, it is important to keep in mind the different perspectives and experience of the team you selected for your company, so you will know you are taking the right determinations.
Use your company size to your advantage
Being a huge company is a strength on its own. However, this feature might be one of their most overlooked weaknesses. There is a point when corporations can’t change fast enough to keep up with the demands of their market and start missing opportunities, that startups can identify and profit from easier. Acknowledge the importance of having enough flexibility to transform your value proposition, adapt your business culture, your marketing actions and communication strategy. With customers or corporate clients changing the way they perceive and move in the industry, this is most important today than ever, so you need to keep up with them.
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Per Damgaard Husted