If you have been thinking about starting a business or simply not working for someone else but are stuck on an idea, then start with the thing that you are most passionate about! Working for yourself (not the same as being an entrepreneur, but a good start) should not be swapping a soulless, dream-crushing job for another one with less security, more hours, and the additional burden of being a book-keeper, cleaner, and “shop-keeper” too. Yet many people find that this is their reality when they take the leap from paid employment.
Passion alone is not enough to make a potential business idea a success and the most successful business owners often start their journey with one idea and it morphs into something else. One of the principal problems is that many business owners think that their idea is a no-brainer and that simply setting up to offer their product or service will be enough to attract willing buyers.
I have come across many business owners that did no market research at all before investing their time, money and happiness into a business that did not differentiate itself at all from the rest of the marketplace. Yet even marginal differentiation can increase the chances of success 10-fold. And it’s not just about talking about “customer service”! Every business says they want to serve their customer in the best way – the ones that succeed are the businesses that don’t talk about it but DO IT.
Only about 50% of new businesses survive the first 5 years, but that is better odds than you might think there are 3 factors that will improve your chances of success.
Success Factor one: Create A Business Plan
Whilst many business owners have run for the hills before sitting down and writing a business plan, it does not have to be a complicated process. And it’s not only about numbers. Writing the plan requires you to think about what your vision is and what problem in the market you are trying to solve. Questions like who your customer is (big clue here, it isn’t everyone), what time frame is realistic for your launch, what revenue model you are using, and importantly, how you will make the business profitable.
Recommended reading: The Beer Mat Entrepreneur, Mike Southon
Success Factor Two: Don’t Spend Money on Swag
In the early days, it’s really easy to get carried away with logo-printed freebies to hand out, fancy offices to operate out of and non-essential staff. Testing out whether you have a viable business is much more important before getting carried away. Spending money on what the business needs rather than what you think it should have is essential. If you are spending money, make sure the activity is generating revenue, reducing expenditure elsewhere, or both.
Recommended reading: The Lean Start-Up, Eric Ries
Success Factor Three: Be Productive, Not Busy
A wise man once told me, “only do what’s necessary to get a sale,” and in the early days of that business, I had found myself doing the books, creating to-do-lists and generally being really busy being busy – all in a classic distraction activity to avoid something that I found challenging, such as SALES! This was reiterated years later when I established another business that required me to step outside my comfort zone.
Make sure that you engage in an activity that is “Getting and Keeping Customers” because that is the only way you will be a success. Every business involves admin, accounting and the actual delivery of the product or service – but none of that matters if you do not have a regular trail of customers.