Starting up a business is a fun and challenging experience. Most entrepreneurs find the new obstacles they must overcome as exciting. While there are plenty of challenges to keep a new start up engaging, there are 10 essential ideas that all entrepreneurs must always keep fresh in their mind.
1. Cash Flow
Everything you do in the company revolves around Cash Flow. Just because your company is profitable on paper, doesn’t always mean that everything is fine. There are countless examples of companies that have failed even though they were making a profit! The reason for this is their Cash Flow. They didn’t have enough cash to pay employees, pay bills, etc. and they had to close down. All their cash was tied up in credit sales that took 90 days to arrive. It is always important to make sure you have cash to handle your expenses because the utility companies don’t care if your turning a profit, they want their payment NOW. Especially with the availability of credit in this current economy, understanding your Cash Flow comes first.
2. Solve a Problem, Profitably
This is essentially the backbone of every business. If this isn’t what your company is committed to and focused on doing, it won’t last very long. A business should always be about making something easier for someone. You must also be aware and be able to gather alls cost that the business will entail (i.e. insurance, rent, product cost, employees, professional services, etc.). Revenue minus expenses equals profit.
3. Creating Value for the Customer
The customer comes first. This seems obvious, but some people can get so focused on how much money the product can make that they get lost in the shuffle of forgetting that it has to be something the customer actually wants. There are many different ways to create value. You can make their life easier in some way (i.e. creating a hands off vacuum) or you can give them an experience that makes them feel good (Dippin’ Dots Ice Cream).
4. Sustainable Competitive Advantage
What makes you better than your competitors? If someone was about to launch a company today and copy you, what would make you stand out? You should try and set yourself up in a market where there are some barriers for entry. Maybe you thrive because of your secret recipe in your food, or you have incredible customer service like Zappos that can’t be easily replicated. Whatever it is, make sure you have something that can not be easily copied. Groupon is a company having trouble with this exact problem. Their business model is easily copied and they have a slew of new copycat competitors.
5. Find A Partner That Compliments Your Skills
In life, most people like to hang out with people similar to them because they are the easiest to get along with. While having a partner that thinks the same as you is helpful in reinforcing that your decisions are smart, it not necessarily the most effective strategy. You should find someone that thinks slightly different than you. If you are spontaneous and always finding new opportunities, it is useful to pair yourself with someone who may be more organized. If you are the type that is very good at bringing everything together and setting up an effective system, it would be wise to find someone that is possibly a little less organized but more open minded and may have the ability to take your company in new directions that you might have not considered before.
6. Surrounding Yourself with Supportive People
You have enough stress going on at this time, you can’t have people around you bringing you down and doubting your ability to succeed. It is really helpful to have a few close people you can talk to in these times, whether it’s a close friend or an encouraging spouse. It is also good to connect with a support group of people going through the same thing. Try and find a local entrepreneurs club in your area. It’s helpful to talk with people dealing with the same amount of stress as you are and you can develop some good relationships there.
7. Anticipating Problems (Creative Problem Solving)
Problems come up. It’s all part of business. I have found the best solution to solving them is to try and anticipate what they will be. When I was starting my vending business, I already had a 2 week vacation to Florida planned. I knew that not being in town could create some problems. Instead of deciding to put off my business until after I came back, I worked out a deal with my best friend to check the machines. He agreed, and all I had to do was compensate him with a couple bags of Ruby Red Grapefruit and the problem was solved 3 weeks ahead of time. There will always be problems that come up and most can be solved. I encourage you to be open minded and creative and you will find a good solution.
8. Handling the Tiny Details
This is the one part of the business that can cause you to get restless. Most entrepreneurs thrive on the challenge of tackling a new task, and minor paperwork and small errands seem to be way too boring and monotonous. The best advice for this when starting up is just: buckle down and get it done! You probably don’t have the luxury right now of hiring employees to take care of small details. Always keep in mind that these tasks are helping you complete the big picture. If you don’t do the little things right, big things won’t happen.
9. Have Resources For Knowledge and Expertise
It is always useful to have knowledgeable people around you. Three minds are better than one. While some of your peers may have some not so useful advice about your business, teaming and working with people that have experience is a great strategy. This can be your lawyer, your accountant, or someone in the same field that isn’t a competitor. Whether the people are working with you, or just coming in as consultants, it’s always useful to get some outside input to keep your company on the right track.
The single most important part of you business is getting out there and networking with people. Meeting people is the number one way to get your business to grow. Networking allows people to get to know what you do, plus it can also help provide you with resources to help you improve your business. When I first started getting into business, I wanted to do everything on my own, but I quickly found out that was a terrible strategy. I switched my game plan around and started networking at every chance I got. I met and developed relationships with so many interesting people along the way, and it also led me to finding both my current lawyer and great accountant.
Okay, there’s what you need to know. Now get out there! Make things happen!