Connect with us

Start-up Advice

9 Steps That Will Help Your Chances of Starting a Successful Business

While there is never going to be a “sure thing,” there are significant benefits to preparing before you take the leap.

Carol Roth

Published

on

entrepreneurship

If you are unemployed, underemployed or unhappily employed, the idea of taking control and becoming your own boss might be sounding pretty sexy right about now. Plus, the past decade has shown us that jobs aren’t quite as dependable as perhaps we previously thought.

However, the success rates for new business are quite scary too, with the majority of all new businesses failing in just a few years’ time.

While there is never going to be a “sure thing,” if you are thinking of leaving your job to hang out your own shingle, there are significant benefits to preparing before you take the leap.

We-recommend-tickRecommended: 6 Things I Wish Somebody Had Told Me When I Started My Small Business

Here are nine ways to make sure that you are prepared before you start your own business, so that you can give yourself the best chances to succeed. These are adapted from my bestselling book, The Entrepreneur Equation.

1. Define and evaluate your goals

You can’t figure out a path to get somewhere if you don’t know where it is you want to get to. Plus, once you have that goal, you need to know if your path is the most direct route to achieving what you want.

Ask yourself tough questions about why you really want to start a business. Are you looking to get rich quick? Do you want to showcase your talent, new product idea or service? Are you tired of your boss taking credit for what you do?

These kinds of goals might lead you down the wrong path. On the other hand, if you love the idea of running an entity, if you like creating systems and procedures, adore servicing customers and if you thrive on wearing many different hats and balancing responsibilities, then entrepreneurship could be the perfect path for you.

2. Stash some cash

The cost of starting a business in many industries has come down substantially. However, that is only part of the story.

Businesses often take a few years to gain a solid foundation, so you need to have enough money to start the business, operate it while it stabilises and also be able to live.

If you don’t have the money yourself, identify whether you have credible access to capital. The downturn has made it more difficult to secure financing and you don’t want to be three months into a business and have to decide whether to keep the business open or pay your rent or mortgage – that’s a losing proposition.

3. Get relevant experience

Being able to manage employees and vendors is the type of skill you’ll need to acquire before starting your own business.

You’ll also need to know your industry inside and out, including aspects that you may not be familiar with or even like, including marketing, accounting and more.

Don’t have the experience? Spend time working in a similar company, shadow a business owner in your industry or take a job on nights and weekends in a comparable business.

Test the waters first with a trial run before you start your own company.

4. Build your network

Business sometimes comes down to not what you know, but whom you know. If you don’t know many people or if you just haven’t warmed up your contacts in a while, now is the time to focus on building a solid network.

We-recommend-tickRecommended: 5 Rookie Networking Fails and How to Avoid Them

 

Strong connections can provide valuable business advice and provide introductions to get you more favourable financing, prices, terms and conditions from business suppliers and professional services.

Connections are your best source of marketing and customer referrals, which is critical for a new business.

5. Know yourself

  • Do you prefer the “status quo” and like to avoid the unexpected?
  • Can you handle a life of highs and lows – including financial highs and lows?
  • Could your savings and bank account handle financial lows as well?

If you are a person who likes stability and control, or if you prefer when things go as planned, the roller-coaster ride of a new business may not be right for you. Be honest about your personality before you take the leap.

6. Visit your lawyer

If you are going to go into a business that competes (directly or even indirectly) with your current employer or if you plan to call on prior customers or contacts, you may find yourself in a legal bind, depending on the paperwork that you have signed with you current (or previous) employer.

Check with your lawyer to make sure that you are in the clear or to find out what you need to do to avoid any sticky legal situations.

7. Stalk the competition

Before you leap into entrepreneurship, take a hard look at the marketplace and your competition. Is your market saturated with successful businesses? Is your industry littered with so many bad businesses that it’s developed a bad reputation?

Both good and bad competitors will influence just how successful your business will be.

You will need to market and brand your business to shine above the good competitors and to make up for the bad ones.

8. Test your idea’s scalability

The most successful businesses rely on automation and delegation. Will other employees be able to do your work? If not, can you teach others what to do in an easy-to-follow format?

If your business relies on your skills, and your skills alone, you might have a successful job, but it may not be that business opportunity you are looking for.

9. Sell first

Too many entrepreneurs spend time and money building out retail stores, manufacturing products or developing service offerings without truly assessing the viability of the market.

See if you can garner interest (in the form of purchase orders, deposits, etc.) before you invest too much capital.

If you have a lot of interest in your offering, there will be less risk in pursuing it full time. If you don’t get any bites, you may want to rejigger your offering, pricing or business model before investing your full time and effort.

Putting in the time and effort up front to stack the odds in your favour will help you avoid having one of those businesses that ends up in that percentage of failures.

This article was originally posted here on Entrepreneur.com.

Carol Roth is an on-air contributor for CNBC, a “recovering” investment banker, entrepreneur and best-selling author. She makes people think, makes them laugh and makes them money, with her accomplishments ranging from her multimedia commentary to formerly sitting on the Board of Directors of a public company to advising on greater than $2 billion in capital raising, M&A, joint ventures and licensing transactions. Carol splits her time between her main residence in Chicago and New York City, and also has an action figure made in her own likeness.

Advertisement
Comments

Start-up Advice

9 Quotes Every Entrepreneur Should Live By

Entrepreneurship takes great perseverance. Failure is common. In fact, it is expected. Over 75% of venture-backed start-ups fail.

Jennifer Keithson

Published

on

Prev1 of 11

michael-jordan-quote

Entrepreneurship takes great perseverance. Failure is common. In fact, it is expected. Over 75% of venture-backed start-ups fail.

There are great learning opportunities that present themselves when we fail, but we must be willing to continue on and try again in order to learn anything at all.

It can be quite an arduous task to strive for your own means, to create your own vision and to rally the support within yourself that starting and running your own business requires.

Thankfully, we’re not in it alone. The wisdom of others can greatly ameliorate the process learning from our missteps and hiccups.

Taking from sagacious investors, inventors and thinkers can help you pick yourself up and make something meaningful out of your quest to become a successful entrepreneur.

By studying the thought processes of other entrepreneurs, we can become more enriched and more aware of how to approach the challenges we face in business and in life.

Here are 9 quotes every entrepreneur should live by:

Prev1 of 11

Continue Reading

Start-up Advice

4 Tips To Secure Funding For Your Start-up

Here are 4 tips to help you secure funding for your start-up.

Ellie Martin

Published

on

business-funding

Entrepreneurs seek to create new and ingenious ideas. Successful business owners are adept at looking at things in new and interesting ways. Their creativity fuels everything they do. Blazing through the initial steps of opening your own start-up can seem like a breeze if you’re endowed with this creative mojo, but you still may find yourself stuck at the very last step of starting your business.

Finding funding is undoubtedly the most difficult part of starting a business, and securing it requires the most creativity of all. Still, you can only stretch your creativity so far. Luckily, there are a few ways you can improve your chances of getting the money you need, regardless of whether you decide to attract angel investors or venture capitalists, or if you decide to apply for small business loans and grants.

Here are 4 tips to help you secure funding for your start-up:

1. Seek alternative funding opportunities

Before taking out a massive bank loan, consider these other funding options:

The vast majority of entrepreneurs either use their own funds to start their business or borrow money from friends and family. According to Forbes, 90% of start-ups fail, with 25% of them failing within their first year of operation. Due to this rate of failure, if it really is impossible for you to attract investors or secure venture capital, it is still best to avoid putting up your own money. Before draining your personal savings account, look into other options, such as crowdfunding. Research small business grants as well, as these can help cover gaps in funding.

2. Write a top-of-the-line business plan

If you’re interested in attracting investors, you’ll need a solid business plan to lure them in. Regardless of how wonderful your idea is, you must communicate that idea effectively and back up your claims with thorough research. A tightly organised business plan has the ability to assure investors of your industry know-how. It will give them a picture of how you plan to run your business and how accurately you can assess and address risks.

An entrepreneur who has a business plan with a punchy executive summary and a precise market analysis in hand is more likely to attract shrewd investors than one with only an inspired (and undeveloped) idea.

Related: Business Plan Format Guide

3. Network, network, network

The absolute best way to find investors is to network. Generally, you never want to cold call investors with your business ideas. You want to build relationships naturally with those in your industry and in your local community. Talk with other business leaders and go to local events. Offer to help other entrepreneurs and established business owners. They may return the favour by introducing you to reliable angel investors or they may steer you to a venture capital firm that helped launch their start-up. They may even offer to pitch in some of their own cash, if they really take to your idea.

Moreover, to make sure your networking efforts are effective, try to pinpoint the audience who would be most interested in your idea.

“Network selectively,” advises American author and entrepreneur, Steve Pavlina. “Take the time to build a profile of your ideal customers, and target your networking activities to reach them. Speak to those who are already predisposed to want what you offer.”

Building connections is a vital part of creating your business. You’ll need to build new ones and strengthen existing ones, not only to get the funding you need in the short term, but also to survive as a business in the long term. 

4. Be prepared to compromise

Asking for funding for your startup means experiencing failure time and time again. Most of the investors you’ll encounter will pass on your idea. You shouldn’t take this to heart. It’s all a part of the process. You may find that in order to get the funding you need you’ll have to give a small piece of the business over to an angel investor.

Your first crowdfunding effort may fall short, and you might have to incorporate feedback from backers and implement changes to the core of your idea to crowdfund successfully the next go around. Don’t be too rigid with your vision. If you’re willing to make some slight changes, you could have a much better shot at landing a deal.

Securing funding for your start-up is no easy task, but it is certainly not one you have to do alone. Enlist the help of friends, family, and business associates to help you craft a superb business plan, meet other entrepreneurs and investors, and make revisions to your idea. Use their input to help you find other ways to fund your start-up, such as small business grants and crowdfunding. Use these 4 tips for securing funding for your start-up, continue researching your target market and refining the way you approach investors. Without a shadow of a doubt, if you’re willing to seek the advice of others and compromise when necessary, you’ll find a way to fund your start-up.

Continue Reading

Start-up Advice

7 Strategies For Development As An Entrepreneur

What follows are seven simplified yet key strategies to develop yourself as an entrepreneur which are a hybrid of the authors’ practical experience and what he has learnt from very successful entrepreneurs, coaches, and consultants over several years.

Dirk Coetsee

Published

on

business-strategies-for-entrepreneurs

What lies behind you and what lies in front of you are tiny matters compared to what lies inside of you” – Ralph Waldo Emmerson


I am an entrepreneur, I surround myself with business minded people, I am privileged enough to be mentored by great leaders. I speak to visionaries, I write about them and learn from them.

What follows are seven simplified yet key strategies to develop yourself as an entrepreneur which are a hybrid of the authors’ practical experience and what he has learnt from very successful entrepreneurs, coaches, and consultants over several years.

A wise man once told me, “A higher level of consciousness does not mean you are better than anybody else it just means your mind sees from a higher vantage point and therefore you see clearer than most.”

Related: 8 Entrepreneurs Share Their Best Advice For When The Going Gets Tough

Those wise words lead us into explaining the first strategy:

1. Expand your consciousness

Simply put your consciousness is nothing but what you are aware of. By increasing what you are aware of through experience, study and honest self-reflection and by inquiring deeply into every aspect of your business as to increase the quality of your awareness you are enhancing the quality of your experience as an entrepreneur.

The second strategy often referred to as priming or framing is commonly used by successful entrepreneurs:

2. Priming or framing

Priming or framing is creating a positive mindset first thing in the morning which builds mental strength and the capacity to face the day with a very good attitude. This is, in essence, done by creating a morning ritual or habit for yourself which can take whatever form you prefer, as long as the outcome of it is a stronger and better you.

Some prefer meditation and/or prayer. Others repeat affirmations in the mirror. Some take the quiet early morning hours as the opportune time to read and learn more about their craft. Exercise is another way to start your day in a positive way. See this exercise of Priming or framing as an investment earning compound interest over a period of time.

nelson-mandelaGoogle whom any famous leader or entrepreneurs’ mentor was and a name or many will most certainly pop up. Nelson Mandela’s’ mentor was Oliver Tambo, Warren Buffet holds the Dale Carnegie certificate proudly displayed on his office wall in high regard, the famous investor Ray Dalio is still coached by Tony Robbins.

Related: (Podcast) Being An Entrepreneur Is Painful

That explains why you should:

3. Be willing to be mentored

When I facilitate training or a coaching session a common objection to being mentored is: “ Yes , but I do not know anyone that could mentor me.”

Honestly, what a lame excuse. Most servant leaders understand that it is part of their duty to society by leaving other servant leaders and/or entrepreneurs behind and are actually just waiting for your call.

It is really as simple as that, make your list of people that you look up to and want to be mentored by and call them, sincerely tell them how much you admire them and ask for guidance and mentorship. To those whom knock sincerely a door will be opened.

There is no such thing as a “self-made man” as everyone has received some help in some shape or form along their journey of entrepreneurship.

It is much harder to give up on something that you really have worked hard for over a long period of time as opposed to something that you have approached with half-hearted intent and little effort.

Therefore:

4. Hard work compounded by smart work

Hard work is not only something that you should do to stay ahead of the competition but a necessity in order to build resilience.

When you have lost sight of your purpose and vision as an entrepreneur decision making becomes drastically harder, your morale might be affected negatively, and your bank balance might suffer as a consequence.

So:

5. Ensure that you have constancy of purpose and a clear Vision

A very effective way of priming and/or framing is to remind yourself of your purpose and vision every morning. Make your Vision and purpose visual by displaying it clearly at your office. An entrepreneur cannot talk regularly nor enthusiastically enough about his or her vision and purpose. When you have not wholeheartedly bought into a vision and purpose how can you expect your team to?

ian-fuhrThose whom embody servant leadership of which the founder of Sorbet, Ian Fuhr is a prime example know that unconditional giving as a principle not only builds character but empowers others so that we can not only grow as businesses but as people.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

That is the reason for:

6. Giving without expecting anything in return

When you give of yourself unconditionally you have a true servant heart and your clients will not only be loyal, but they will love you in general. Giving unconditionally feels good and receiving unconditionally places no burden on you and creates a wonderful and vibrant work atmosphere, generally speaking.

When you only take a stand on your principles and values during good times yet allow them to crumble in the face of challenging times “your house is divided and cannot stand”.  Your principles and values must become ingrained practises and not just frivolous words.

Taking the aforementioned into account:

7. Have non-negotiable principles and values that you live by

As an example, if when respect is a non-negotiable value that you live by you will refrain from losing emotional control and will be willing to walk away from a conversation where someone dis-respects you.

Continue Reading

Trending

FREE E-BOOK: How to Build an Entrepreneurial Mindset

Sign up now for Entrepreneur's Daily Newsletters to Download​​