Some human’s perverse nature makes easy things look difficult. Ignore the hype and hoopla about startups and things become simple. Starting up and running a business is easier than we think. It may be demanding initially, but the rewards and joy entirely justify the hard work. If you have an idea and planning to start a business in future, then do it now.
The most unusual way to ensure the success is to adhere to core principles of running a business:
Money, money, and money
In its basic form, a business involves a buyer and a seller. The end objective of a vendor (or business) is to make money by selling products or services. As an entrepreneur, you need three things to build and sell a product or a service; time, money and expertise.
Time – Time is constant for everyone. You will get your share of 24 hours without doing anything.
Expertise – It takes the time to develop new capabilities and competencies. However, your current expertise is sufficient to start a business, irrespective of your education background, work experience, etc.
Money – This is the essence of life. It is easy to spend and hard to earn. At no point in time, you can’t afford to run out of cash. Venture capital, business loan, angel funding, etc. can only help if you have sufficient money to take care of necessary things. Moreover, money can also buy time and expertise (by hiring new people).
To build a successful business, you need to ensure consistent inflow of money by utilizing the time, money and expertise at your disposal. The faster you execute the cycle, the sooner you reach the climax and feel the pleasure.
No matter what business you are in, you need to take care of following to ensure an early success:
First thing first – Get Money
“Everyone has a plan until they get punched” – Mike Tyson
Never wait for having a business name, website, brochure, visiting card, an office or even a perfect product or service. Your face value has higher credibility than all the marketing collaterals. Define your product or service and sell the same to five customers before doing anything else. And I am not talking about taking feedback and free bits of advice from your friends and family. (We all know their standard answers). Until someone pays for your products, it is usually useless. The paying customers give best punches and become the ultimate source of inspiration. Even the greatest Gurus can’t teach you what you learn about your business in the process of acquiring first five customers.
According to a survey, most of the startups fail due to following 20 reasons.
|Reasons||% of Startups stated this reason for their failure||How it can be addressed|
|No market need for their products||42||Gauge the market need by trying to acquire customers early|
|Ran out of cash||29||Constant inflow of cash - Acquiring more clients|
|Not the right team||23||Founders' Expertise|
|Pricing/Cost Issues||18||You can identify pricing mistakes if you talk to prspective clients|
|Poor Product||17||By trying to acquire new clients as early as possible|
|Need/Lack Business Model||17||Acquiring new clients|
|Poor Marketing||14||New client acquisition|
|Ignore Customers||14||Customer Service|
|Product Mis-timed||13||Market Research/Client Acquisition|
|Lose Focus||13||Founders' vision|
|Disharmony on team/investors||13||Founders competency|
|Pivot Gone Bad||10|
|Lack Passion||9||Founders competency|
|No Financing/Investor Interest||8||Bootstraping, Acquiring more clients|
|Don't use Network Advisors||8|
|Burn Out||8||Founders competency|
|Failure to Pivot||7|
If you manage to gain five clients, in the beginning, you can address top 10 challenges that leads to failure for almost 70-75% of the startups.
For first six months, spend on things that matter the most. Be frugal with time as well as money. First six to twelve months determine how far you will go. And running out of cash is not an option. Whenever you need to buy something, consider alternate ethical ways to get things done with minimum expenses. The only thing that you shouldn’t compromise is the quality of product or services. For everything else, it is okay to be mediocre.
Prefer Technology over People
Many times you may feel the need to hire more people to share the workload, do technical tasks, or simple consultation. Explore technological solutions before posting a job requirement on social media or job portals. For example, you can develop a basic website at no cost using free WordPress themes or even create an excellent site by purchasing a Premium WordPress theme at a fraction of what a web developer will charge to develop the high-quality site. Similarly, you can buy custom logo, explainer videos, etc. from Fiverr at just $5. Today, technological advancements have made it possible to do the complex task using simple web applications. You can reduce operational cost significantly by using these services. Over time, you may need people to scale up your business. However, at the initial stage, hire full-time employees will create a liability. If at all you have no option but to hire someone, try to engage with freelancers on Fiverr, Freelancer or Upwork.
Believe in Yourself
You are more important than your business, products or customers. Believe in yourself. Trust and follow your inner voices. In entrepreneurship, there is no term such as failure. You will either succeed or learn something that is invaluable. Business schools and corporate world doesn’t teach these life lessons.
Everyone has their unique way of running a business. There are no fix rules of winning or losing. Those who learn and evolve quickly tend to be more successful than others. In difficult times, just go to basics, and I am sure you will get all the answers.
I wish you all the best. I would love to hear your opinion or feedback in comments.