Starting Out as an Entrepreneur? Here’s What You Will Need
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When you choose to hack your own path through the workplace
jungle, you’re taking on a lot of risk and uncertainty. No matter your
industry, you’ll face financial risk. Even freelancers struggle to find clients
from time to time. You’ll also have to adapt to the varying demands of your
business—you’ll have to be good at both forward-facing client communication,
and head-to-the-books labor.
And just because you’re in charge doesn’t mean you don’t still
conceptually have a boss. There will always be commitments to customers and
business associates. There will always be deadlines.
But the benefits are numerous. Your business is your ship,
and you set the course. You choose your own hours. You choose your goals. No
one can say no to a day off, and nobody makes you wear a tie. But most of all,
you directly receive the rewards of your labor.
There are many methods of entrepreneurship—from working as a
freelancer out of a coffeehouse to building up a large venture backed entity.
The choice is yours. Below, we’ll discuss some of the most important things
you’ll need to know if you intend to make this life-changing decision.
Follow your dreams
Many entrepreneurs have a fanciful vision of the powerhouse
startup—the business journey paved with gold, where a single tweet or app
concept will make them millions of dollars. This road is a myth.
As an entrepreneur, if you want to succeed, you must be
ready to pay the cost in late hours, tight deadlines, and trash bins full of
empty coffee cups. It will be challenging and test your determination at
times.
That’s why the single best way to keep your spirits high and
stay motivated is to work in a realm that matters to you personally—one that
allows you to believe you’ll be able to leave your mark on the world. Do you
enjoy writing? Perhaps there’s a place for you in content curation, or even
freelance blogging. Are you passionate about social justice? Maybe consider
working in the realm of nonprofit.
Be specific in your choice. You don’t need to be all things
to all people. Niche selection is the place most people feel they made a
mistake. Remember, Amazon was a bookstore before it moved on to dominate the
sales of, well … everything.
Don’t choose your industry because it seems easiest or like
the quickest way to fill a vault with gold. That method will burn you out much
quicker than you think.
Research
“Don’t play games you
don’t understand, even if you see lots of other people making money off of
them.”
Before you work a single day in your industry, you need to
put a lot of labor into research. Be certain your business concept is viable
and you can do so by defining the following:
Clarity of purpose: Summarize your company in two to
three sentences
Rich Customers: Target customers who will move fast and pay
a premium for a unique offering
Focus: Customers will only buy a simple product with a
singular value proposition
Pain: Pick the one thing that is of burning importance to
the customer and delight them with a compelling solution
Think differently: Constantly challenge conventional wisdom.
Create new solutions. Outwit the competition.
Team DNA: Choose your first few hires wisely
Agility: Stealth and speed can help you beat slow incumbents
Resilience: Hone your ability to bounce back and keep trying
Frugality: Focus spending on what’s critical. Spend only on
the priorities and maximize profitability.
Inferno: Start with only a little money. It forces
discipline and focus.
Especially important during this phase, don’t just read
books and online articles (I mean, read a lot of online articles, but
do more, too). Find successful experts in your field and drill their brains for
the precious oils of information and experience. Ask them what their early setbacks
were, what were the best choices they made, and how they would go about it
differently if they had to start over.
Develop a business plan
That genius business idea you have? It’s not worth a
counterfeit dollar if you don’t pair it with a functional plan.
You may think you don’t need a business plan because you’re
the only one initially involved in your project. That’s incorrect.
As an entrepreneur, the road ahead will be laborious at
times, even extremely difficult at others. That’s why you must be
ready to navigate all potential obstacles. You have to carry a map, and your
business plan is that map.
But even more so, you need a business plan to approach
investors or to acquire bank loans.
Your business plan should put together a reliable and
realistic model for the future of your company. Many young entrepreneurs place
too high a value on their businesses. Don’t make this mistake. Investors will
see right through deceptive optimism.
Your business plan should include:
Company purpose: Start here. Define your company in a
single declarative sentence. This is harder than it looks. It’s easy to get
caught up listing features or services instead of communicating your mission.
Problem: Describe the pain of your customer. How this is
addressed today and what are the shortcomings to current solutions.
Solution: Explain your why. Why is your value prop unique
and compelling? Why will it endure? And where does it go from here?
Why now? The best companies almost always have a clear why
now? Nature hates a vacuum—so why hasn’t your solution been built before now?
Market potential: Identify your customer and your market.
Some of the best companies often even invent their own markets.
Competition / alternatives: Who are your direct and indirect
competitors. Show that you have a plan to win.
Business model: How do you intend to make money and thrive?
Team: Tell the story of your founders and key team members.
Financials
Vision: If all goes well, what will you have built in five
years?
The 10-year overnight success
Rome wasn’t built in a day.
In your first year, you’ll mostly handle the logistical
necessities and survival will be your primary goal. It’s rare that young
businesses launch into success and entrepreneurial stardom, so don’t worry if
it’s a little rocky at first. That said, the first year is also dangerous if
you make mistakes so you’ll want to plan intricately.
Go into your first year with goals established, and clearly
delineated steps to reach them. Be optimistic but reasonable in these steps and
ask your expert sources if they’re doable.
When your first year is up, you’ll have the benefit of
hindsight. You can see where you underperformed, where you over performed, and
adjust your expectations going forward.
A five-year and 10-year plan
Obviously, the ultimate plan for your business is to do more
than just exist. You want to thrive.
To do this, you should have a set of goals established every
five years along with a series of milestones to reach them. When you’ve gotten
beyond the first year, your five- and 10-year plans are critical to your
success.
Have an exit strategy
Along with your mid-range plans, you’re going to want to
establish your endgame early.
Dream big here. Ask yourself, in the best case scenario, how
do you want to leave your business? What goals should be met before you string
up that “mission accomplished” banner?
You have options in this area. Maybe you want to run the
business all of your life. Or maybe you plan on retiring and would like to
leave your business to your children—or if you don’t have children, maybe to an
orphan with a golden ticket.
You’ll always have the option of selling your business as
well. Will you sell to the highest bidder, or the buyer who is most capable of
carrying on your legacy?
Whatever your goal, you should establish it early and make
plans to reach that point down the line.
Starting a business is rough and most fail. Your best
chance to thrive is to find the right community, the right partners, and the
right network of support from the very beginning. I love nothing more than
meeting founders during their first days starting a company.
