Entrepreneur. It’s a sexy word, right? So many people dream about leaving their full-time gigs and going out on their own. While there can be tremendous upside to a start-up, there are also a lot of negatives: long hours, uncertainty, stress – the list goes on. Still, millions of people each year want to take the plunge and I don’t blame them! I am a serial entrepreneur myself and I can’t imagine it any other way.
Recently I have been asked by quite a few budding entrepreneurs to meet with them, discuss their idea, review the business plan, give them advice, and even to invest (no, I’m not looking to invest in any companies besides my own and Owen College Fund, Inc!) Through all of these meetings regardless of the type of business I find myself repeating a few key points so I thought I would share them. Ready? Let’s go….
Understand the financials.
What will it take to get your business off of the ground? Is there a serious financial commitment up front, before the ‘doors’ even open? Do you need to find an investor, whether VC or Angel? Don’t know the difference? Learn the difference between Angel Investors and Venture Capital here.
Determine your appetite for risk.
Typically, service oriented firms have much less financial risk than product based, retail or other brick and mortar companies. Are you going to start-up part-time or full-time? Will your venture even allow part-time or will you need to make calls and meet with clients/customers during the day? Your appetite for risk (quitting your job to go full time or not) will determine your business struture. If you don’t have enough money sacked away for at least 6 (I prefer more) months of no income you are NOT prepared to go full-time. Your financial stress will force you to make poor decisions that are geared towards making a short-term dollar versus sustainable growth. Figure out how to start part-time instead.
Determine your goals.
Do you want to make *channeling Dr Evil* one MILLION dollars or are you more about work-life balance (which, BTW is a myth).
I hear it’s possible to have both, but I’ve never seen it in real life, so choose now. To clarify – I mean crazy stupid money like the Instagram sale last week. Many entrepreneurs are doing very well financially, but that doesn’t mean they can buy a small country.
The work-life balance myth link above states that we each have different times in our lives where we can dedicate more of our lives to work, and other times (such as when we have young children) that we might pull back the hours for more hours at home. I’m a firm believer in this and am living the lifestyle myself right now with a successful marketing & pr agency and many hours at the park with my son. Before he was born I was a workaholic. Identify your priorities and stick with them throughout the business planning process. *Stay tuned next week for my post on goal setting!*
Understand the competition (and market).
Are you the first person to come up with a super-awesome-great idea? I hate to break it to you, but life will be hard for the first few years. You will not only have to build a brand, but also convince customers they need what you’re selling. I prefer to find a niche where competitors exist, but they do a poor job servicing the customer. Don’t create customers – steal them (or, to be more accurate – earn them away from the competitors).
Google your idea using keywords customers would use. Find competitors and try to understand:
* How do they price their product/service?
* Do they seem busy/successful? Look for awards, top X lists, and other credibility builders.
* Do they have good testimonials online from happy customers or negative reviews?
* Based on what you know about the market, what are they missing in their offering?
Next, use Google’s free external keyword research tool to find out if customers are searching for your product. Type in your keywords (again, what customers will use to find your product/service) and hit enter. How many people are searching for this every month? Google will auto-suggest similar keywords so pay attention to the final list. Are there variations that have more searches that would provide a leg up from your competitors? For example, instead of ‘Mac laptop’ perhaps ‘Macbook Air laptop’ is the better opportunity. Keep in mind these numbers are only estimates but it can point you in the general direction you should be heading.
Get to market as fast as possible.
What are you waiting for? If you want to sell a product create a prototype and get it in a local store and see if it sells! If it’s a service, create a super basic version of the idea and start offering it to see if you get interest. Don’t wait until your offering is ‘perfect’ to start selling or you will never get started!
Identify your core team.
I saved this for last, but it’s very important. Through the course of owning several businesses (one which was acquired) I finally see the value of having a business partner. My current agency is growing faster than any of my prior and more important – all of the T’s are getting crossed and I’s are getting dotted. Our core team is so comprehensive we’re able to accomplish much more than any of us could alone and the successes our clients are experiencing is pretty phenomenal. Plus, none of us are ready to be checked into a mental hospital for stress. That alone is worth it!
I was lucky enough to be introduced to my business partner through a mutual business colleague (and friend) but if you’re searching for a partner be sure to attend every local networking event you can! Try Meetup.com – there are entrepreneurial events in every city and if there isn’t one in your area start one! While in Seattle I launched Young, Female Entrepreneurs (YFE) and by putting myself out there made countless friends and colleagues along the way. In my experience it’s much better to be the host(ess) at an event than an attendee.
Did I mention get to market as fast as possible? Really, I can’t stress the importance of this enough. Stop talking about your idea and refining your business plan 20 times – get out there! Next week I’ll talk about goal setting. It’s the reason why I was able to grow my prior business to the size that an acquisition was possible and it’s an process that works! Stay tuned….
Wait! Before you go – are you following me on Twitter (@JennyDibble)?