Level up for success as a first-time entrepreneur
The last few months have been hugely difficult for all. The nation has been rocked by COVID-19, and the economy has suffered. For many people, the loss of their job or realization of how little control they have over their life and livelihoods has made them consider starting a business.
The question is, as a first-time entrepreneur, what challenges will you face and how do you overcome them?
1. What business should you start?
This is the first problem to solve. Successful entrepreneurs are problem solvers. They figure out what it is that people need, and then they build a business to supply that need. So, you need to see the world through the eyes of other people.
Get out and ask people what it is that they most desire. Learn what people can’t do without, and what they crave most. And know who your customers are – opening a toy shop in a suburb where there are no children probably isn’t a good idea.
Take notice of what is going on around you. Which local businesses are busy? Which are empty? Why?
2. Understanding your strengths and weaknesses
Once you’ve decided which type of business offers you the greatest potential to profit, you then need to take a deeper look at yourself. Is this business something you are cut out for?
There’s no point in opening a cell phone repair shop where you are the sole employee if you can’t repair cell phones. So, think about the skills you have, and the skills you need. Is there a gap? Can you close that gap with training? Can it be closed by employing experienced people? How would this affect your potential profits?
When you are evaluating strengths and weaknesses, think about the soft skills you need in your entrepreneurial life, too. You may be the main salesperson, do all the admin, maintain stock, and need to manage staff. Do you possess the people skills to lead a team? Can you quickly gain the skills you need?
3. Creating a strong business plan
A business plan is essential when starting a new business. Good planning helps you to identify potential pitfalls and avoid them. It delivers perspective on your business needs, and is crucial in gaining funding.
During the planning stage, you must consider every element of your business, from suppliers to customers, to competitors. Your business plan will define your business, its objectives, its customers, and how it operates. It translates all of this into financial projections that help you – and your financers or investors – predict the potential for success.
4. Managing your time and learning to delegate
As well as a poor mix of skills and business acumen, another major challenge for entrepreneurs, especially those starting a new business, is a lack of time. It’s natural to want to be involved in every aspect of your business, but there are only 24 hours in each day.
Here’s the thing – you own the business and it’s your responsibility. But as part of this responsibility, you must understand your limitations. Do what you do best, and delegate to others the things that others do better than you. This can be hard to do, but it makes sense to do so. (We’re back to people management, again.)
5. Getting the marketing right
You can produce or stock the best widget in the world, but if people don’t know about it you won’t sell any. We’re talking marketing. You need a strategy, and you need the skill to market your goods and services.
You need to know where and how to communicate with your customers. Will you advertise in local newspapers, online, on billboards, or by phone? How do you create marketing messages that encourage your customers to buy?
Your marketing strategy should have vision and include measurable goals that you can plan to achieve.
6. Overcoming your competition
Competition is one of the biggest challenges you’ll face. Bigger businesses than yours might try to keep you out of ‘their’ market. Other entrepreneurs that have the same idea as you may crowd you out, reducing your sales and revenues.
First, competition isn’t necessarily a bad thing. It forces you to do what you must to win and retain customers – be the best. But before you start your business, it pays to know who your competition is, and what you need to do to be unique in your market.
7. Getting your business financed
Initial financing and cash flow in the first year of starting a business is essential for new businesses. There are various grants that you can apply for, but you’ll probably need to access other financing, too.
A strong business plan that demonstrates you have considered and planned for all the points made above is mission critical. You’ll also need to consider how to minimize costs without damaging your business, as well as speeding up your cash flow from customers. Accounting software will help you to maintain a watchful eye on your business finances, as will a good accountant.
Here’s what I know
Life is full of challenges. It’s inevitable that life as an entrepreneur will be, too. By considering the challenges of starting a business before you take the plunge, you’ll boost your chances of success. Understanding your own strengths and weaknesses will help you identify the best business for you, and what skills you need to import by hiring others.
Understanding these seven challenges will help you plan to overcome them. You’ll be more keenly focused on creating the success that your effort deserves. You’ll be more resilient and more resolute on achieving your goals – because you are more prepared to face these challenges head on.
Whatever challenges you face in business and as an entrepreneur, people buy from you because you offer a better service or product. Banks deal with you because you have solid business plans. Your people work for you because you treat them like the human beings they are, and because you lead them well.
How you deal with your challenges will define you – as a leader and as an entrepreneur. The question is this – do you have the mindset to run a business? Have you got what it takes to nix the emotion and make the business decisions that will drive you forward?
I’d love to hear your answers to these questions. I’d love to hear what it is that is holding you back from becoming the entrepreneur that is hiding inside you. Let me know in the comments below.