What must young/first-time entrepreneurs know before they build a company?
Are there milestones, starting points or specific checklists I should go through before I begin to build my first company? Any advice would be appreciated, thanks.
I am going to break from the herd and say the following:
Failure is to be welcomed because that is how we all learn. Know that this will likely not be your last business or your best, but the process of starting the business is necessary if you are ever to reach those.
- Passion. Fire in your belly. You need to believe in what you're doing.
- Communicate your passion
- Don't start spending money unless you've done the one below.
- Talk to as many people as possible about your idea, especially potential customers. Don't try to sell, but ask for advice and feedback on your idea.
- Be persistent. Don't give up at the first obstacle
- Be flexible. Don't hesitate to change your product idea or business model to adapt to current situation
- Read about the "lean start-up"
- Bring experts in the field to form of a Board of Advisors.
1. USP - Unique Selling Proposition (what do you offer that others don't. If you have this your business is more likely to last longer)
2. A good knowledge of how competitors are faring
3. Quick and good decision making skills
These top my list. All the best
Researching and planning are important because you certainly do not want to be learning by trial and error. On the other hand - paralysis by analysis is just as deadly. Do not wait until everything is "perfect" to launch. You will starve before you get there.
Also - expect it to take substantially more money and time than you anticipated. My rule of thumb has been anticipate 3X of each.
Don't expect to do everything yourself. Be willing to rely upon the expertise of those who know specific areas of business better than you. This includes planning on hiring an executive team for any and all functions, including CEO, where you lack the experience to be the best person to help build the team in that function.
The key thing to know is that you don't know what you don't know. And that's true no matter how much experience you have. Entrepreneurship is learning a series of critical skills in a context where your lack of those skills threatens the very survival of your company. It's dangerous and exhilarating. There's no checklist. Just start learning as fast as you can!
You started the game don't leave before it's finished. Give it at least 5 years, learn about the company, the products because even though you don't need to know everything, you have to know and use what you're offering. USE THE TOOLS the company provides, it will make it easier. Choose a system and follow it to the T. Don't give up that's the only way you can fail. Make lots of friends and enjoy the process don't be hard on yourself. "Some Will, Some Won't, So What, NEXT!"
When I was 22, I asked my college professor: "What do I need to start a business?" He said: "A good business card!"
At first I thought he was full of it, but now considering what he said, I think that he was right because a good business card identifies the following:
1- Know what your business is
2- Target audience (customers), their culture and needs
3- Make it easy for potential customers to reach you (contact info, and being available)
4- Provide great service or product, the business card will be a "word of mouth" tool and the best tool for advertising
5- The business card defines your identity --> define your identity within what you're providing to your customer base
6- Business cards are not expensive to make (whether digital or in print) --> stay frugal but not cheap
Make sure you know how, what and who to sell to. No business can survive without sales. Do not expect others to sell for you. You can delegate production, management, purchase, accounts and just about everything else but not sales.
Expect to work long hours at the beginning. Don't think you will be the next Mark Zuckerberg and that your idea will change the world- in other words be realistic about your business idea and your plan for growth.
I agree with Mike and Gerald. You need to research and plan.
You need to find out if there is a market for whatever it is you intend to sell, whether it's a product or service. Is there someone already doing it?
Are you local or is it national? Do you have something to offer above and beyond your competitors (USP)? Which routes to market do your competitors use? Can you come up with something more customer focused?
Without researching the market, your competition, and your competitors, you won't have a clue whether your service or product will sell.
I had a client who wanted to sell a short H&S course online. He thought it was a great idea for £12, a mandatory course to work on a building site. I sent him away to research. he came back the next week, very grateful that he hadn't just started his business as he had intended, as he had found a website which provided this basic course free of charge - he therefore had no business!
So this comes with the business plan - then you build on that - pricing, marketing strategy, routes to market.
I do also agree, a good mentor is invaluable.
So for me, it's about research and listening to a mentor.
The first company isn't yours. It very quickly becomes the property of investors, unless you're ridiculously lucky. The most important implication of that is that you should choose your investors wisely. Pitch people who bring more than money to the table, with whom you have good chemistry and for whom you won't mind working.
Granted, you can't really control who's first to the table with money,but you can control who you pitch, which has an indirect influence on who you have to live with in the long term.
First, you don't need to be young to be a first-time entrepreneur and not all young people are first-timers. Ask yourself, "what problem can I solve and who will pay for a solution?" Then ask, "am I the person to solve this? Why me?" Then, "how is this problem being solved now? Can I create a BIG improvement in that solution?" If you cannot answer, "the problem is BIG and lots of people will pay BIG money for a solution, I am the right person to solve this because I understand the pain and have a creative solution to the problem people will love, and that solution will be reasonably unique or so far ahead of current solutions that I will reap the financial rewards due me from this awesome solution...then, young or not, keep your day job.
Remember the 3 R's ;
Respect for self;
Respect for others;
Responsibility for all your actions.
I agree with Mike, but I would also add that you have someone help you put together a very strong business plan. With the plan, you will identify your milestones, important checklists, and you path to success. Don't be afraid to ask for help . . .if you do this right, you set yourself up for success. Do it wrong, and you will spin your wheels and get nowhere. Let me know if I can help!
Principal Consultant, Crossroad Insights
Discover. Grow. Transform.™
You need a core expertise, which alone or with other founders, gives you a competitive advantage, a 1-2 year lead on the competition, in a sector for which your product/service is in demand as a mission critical solution in the current economy
You need a strong personality, balanced with a willingness to learn and a willingness to be coached by experts that you can identify
A strong work ethic, the ability to prioritize well, ability to do a (very) good enough (but not perfect) job on something, good public presentation skills, and the ability to make good decisions about hiring/partner relationships
Having the ability to put together $50,000-$100,000 in FFF (friends, family, and fools) financing will help a lot.
Start small and plan to grow. Write you business plan so even you want to read it. Then read it every month for the first three months and then every six months for the next two years. This does a few things. You will know your numbers like the back of your hand and you will know when things are working right and if and when to fix it. Know that you will have set-backs and failures and that's normal! Your business will never be perfect so get used to it. Write a marketing plan annually that you will actually execute. And FOCUS! It will be easy to get distracted by shinny objects and everybody wanting you to try their widget to get rich tomorrow. Running your business is a marathon and not a sprint! The goal is to build a business that last and makes money!. Have a blast!
WOW! That's a loaded question.. the 1st thing I would say is that you NEED to be "Strategic" and this is not some pat answer, it's how you need to think from the very beginning. The problem I had when I started off was I did not know what "strategic thinking" was or how to use it. Now everything I do is strategic! I just wished I would have had someone teach me how to to do it before I invested a year of no growth or profit!
I strongly encourage you to join locak groups or meetups that are focused on entrepreneurship, especially where you can meet and learn from experienced entrepreneurs. No matter how smart you are or how much you read, you will not fare as well as you will if you bring in experience, whether as cofounders or as hired guns. It will save you time and money and greatly increase your chances of success to have experience involved from the beginning.
1. Identify customers
2. Estimated sales for them
3. Find out the price structure and competition
4. Make a realistic budget
5. Make a decision on these points after the establishment of the company
Best of luck!