Albert Einstein once said, "The only source of knowledge is experience." After 25 years of helping entrepreneurs and small-business owners succeed, as well as building my own companies, I’ve learned a lot about what works and what doesn’t work when it comes to running a business. I've discovered five crucial points that every new business owner and entrepreneur just starting out needs to consider.
1. Decide who you are. Are you a small-business owner or an entrepreneur? A small-business owner is someone who makes work-life balance a priority and sees most purchases for his or her business as expenses. An entrepreneur is someone who makes his or her business a priority and sees most business purchases as investments for growing their company. Small-business owners are in it for the long haul and value that stability. Entrepreneurs entertain thoughts of the next big thing or invention, and they enjoy taking risks.
There are many forks in the road for a young business—hiring new employees, investing in capital equipment and technology, opening new locations, entering new markets, and partnering with other companies. And your decisions on which way to go will be driven by your view of who you are. Take some time and consider the question of small-business owner vs. entrepreneur.
2. Have a plan. This means a concrete, written road map for where you want to go and how you will get there. It’s not optional. All too often, entrepreneurs get caught up in the excitement of starting their own businesses and want to jump right in without investing the time and effort to create a plan. Big mistake! The process of thinking through and writing down a plan will help you organize your ideas and identify your strengths and weaknesses.
Some questions to consider: Who is my target market? How will I reach those people? Why should they choose me over a competitor? What can’t I do—either because of lack of time or lack of expertise—and who can help me do those things? What are some concrete short- and long-term goals? What are the biggest challenges I will face? How much money do I need to get started, and where will it come from? Create your plan, refer to it regularly and update it as necessary.
3. Have a backup plan. I’m all for optimism, but do yourself a favor and add a dash of realism. That means think about “Plan B” at the outset. You may think you’ve created a fail-safe business plan, with plenty of detailed figures and charts that indicate success is inevitable. Don’t count on it. In this fast-paced, ever-changing world, business rarely goes according to plan. Invest time upfront to think about what you will do “if”—if you don’t get the loan you apply for; if an investor doesn’t come through; if sales don’t meet projections right away, etc.
4. Be realistic. If all goes well, you get your business off the ground and in short order you have a steady stream of customers. That kind of early success is a mixed blessing: It’s obviously a great confidence and cash flow booster, but the high it creates can lead you to bite off more than you can chew. You’ll find yourself working more hours, going after more new clients and potentially shortchanging your existing customers. Be patient—and smart—with yourself and with your business.
5. Create balance. We all know the importance of having proper work-life balance, but so many of us don’t actually live it. Don’t fall into the trap of believing that working 16-hour days will make you more successful.
Create a reasonable schedule and stick to it. Not every email needs an immediate response and some phone calls can wait until the next day. On the flip side, do take advantage of technology (e.g., apps and automation services) that reduce your workload. Also, eat wisely and make time for physical activity—whether that’s a walk around the block or a vigorous workout.
Take time to consider these five points before you really get started on your new business, and you’ll find you have a clearer road map and better sense of where you need to go.
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