They say that setting up a business is one of the most difficult but rewarding transitions a person can make. For aspiring entrepreneurs, launching a business can seem like a daunting, monumental task. Many have the dream, but don’t know where to begin.
One thing’s for sure, before taking the plunge it’s important to do as much research and planning as humanly possible. It’s also crucial to find out as much as you can from successful business owners, as learning from people who once stood in your shoes will help prevent you from making the same mistakes.
We’ve pulled together five lessons learnt by successful business founders in their early stages of business. Enjoy!
1. Ensure you are setting up a business for the right reasons
‘I’d slap some reality into entrepreneurs just starting out. A lot of people start businesses thinking it’s so cool to have your own business, but it’s not. It is the uncoolest thing to have so much responsibility.’ - Katherina Lacey, Quincus
The truth is, there are lots of reasons not to start a business. In order to be successful, you should be sure you’re getting into it for the right ones. There is a huge amount of pressure and risk tied into entrepreneurship, which is why the decision should never be made on a whim.
Katherina, founder of supply chain technology company Quincus, explains that starting a business required her to make sacrifices, become selfish and work hard seven days a week with little sleep. Her experiences mirror other entrepreneurs, who agree that setting up a business is an endeavor no one can prepare you for.
For this reason, before getting into business it’s crucial to weigh up risk versus reward and make sure you fully understand the work involved to equip yourself as best you can.
2. Don’t underestimate the importance of cash flow
‘We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.’ - Michael Dell, Dell Technologies
Cash flow is important for all businesses, but particularly for small businesses in their early stages. Many entrepreneurs make the mistake of putting the focus solely on profits, but there’s a reason behind the popular saying is ‘cash is king’.
Cash flow essentially represents the overall financial health of a business. It shows how much available money a business has to keep it running, and is crucial to business survival. In order to maintain a positive cash flow, businesses should have more money coming in than going out.
It’s important to invest in cash flow management strategies from the onset. Forecasts and projections can help to ensure you have enough working capital to cover increasing operational expenses as time goes on.
3. Be inquisitive and ask as many questions as you can
‘Asking questions is very important to know what the next steps are in a process. Don’t be afraid to ask questions of others who have gone through the process. Remember you will always need help as you move forward to move to the next level in your business.’ - Michelle Weathersby, LENS Consulting Firm
When it comes to starting a business, the saying rings true. There really is no such thing as a stupid question. Imposter syndrome plays a large part in people not seeking the help they need, forgoing advice in fear of appearing like a fish out of water.
However, asking the right questions can provide huge benefits to your business. There are lots of routes you can take to get the advice you need - business mentors, support hotlines, forums and online groups are just some of the options available.
As an entrepreneur you should remember that it’s more than likely other business owners are going through similar experiences to you. For this reason, a good support network can be found in the startup community.
4. Think less about yourself and more about your customers
“When I first launched my business, I created products and services that I thought people would like because I liked them - only to find out that people came to me for services that I hated but were in the scope of the work that I did.” - Dr Aikyna Finch, Finch and Associates
The focus should always remain on your customers and clients. A customer-focused approach is key to long term business success. However, understanding your potential customers is not always as easy as it sounds, which is why plenty of market research is necessary.
In order to understand consumer behaviours, you should invest time in creating customer journey maps. Keep your customer in mind at each stage of the business, and ensure you are always providing a quality service.
As digital becomes more and more important, optimising user experience for web channels is imperative. Consumers now expect aesthetically pleasing, optimised web channels and investing in user friendly technology will help your business get ahead online.
5. Remember the value of sales and marketing strategies
“In the beginning, I didn’t understand that success was really built on effective sales and marketing. For too many years, I thought just providing a high-quality service was enough. Once I accepted that I needed to become skilled at sales, my business finally began to gain traction and grow.” - Christian Muntean, Vantage Consulting
Strategic marketing is key for business growth. It helps to build brand awareness and increase customer engagement. In today’s competitive markets, effective marketing planning will help your products and services to stand out from the crowd.
If this is an area of business you’re unfamiliar with, be sure to make it a priority when hiring. Your sales representatives will be the primary point of contact between your products or services and customers. Sales plays an essential role in identifying potential new markets and customer leads, all of which is crucial to bringing in revenue.
Following your entrepreneurial ambitions
Statistics reveal that 64% of Britain's workforce dream of starting a business.
Though there’s a huge amount of work required, if you have the drive and vision, you shouldn’t be put off by what could go wrong. Instead, you should think about all the things that could go right!
By figuring out what’s holding you back from becoming an entrepreneur, you can quickly begin to make plans to get your ambitions off the ground.