Just about everybody has a good business idea so why don’t they always happen? It is the fear of failure that stops us from following through with our ideas. More often than not, your peers will dissuade you by pointing out why it won’t fly or why you’re not cut out for it.
My advice? Ignore them! It’s Freudian really, what you’re highlighting is their own fear of failure. They can justify this fear by saying – I spent all that time at Uni getting a qualification so I’m not going to waste it, it’s a good idea but I have no idea about setting up or running a business or I have commitments if it fails, I lose the lot!
If the world’s greatest minds were to think this way then we wouldn’t have any successful start-ups or entrepreneurs disrupting the market with their innovative thinking.
Here are 13 key tips to keep in mind:
1. What makes a good business idea?
Remember it doesn’t have to be unique. Most things have already been thought of or invented, it’s more about finding a good idea and looking for ways it can be improved.Many entrepreneurs look at the barriers to entry and the competitive landscape when getting started but what they often overlook is what the exit would look like. It can become complicated when you are the business as you cannot simply sell off and successfully exit without complications.
2. Partners: A major consideration
In the beginning we like to involve friends because it helps with the validation process but beware and trust your gut instincts as they will almost certainly prove intuitively correct, sometimes when it’s too late. There are a number of reasons I would shy away from involving friends too much, as it’s hard to know if they will be as committed as you are or what their work ethic is like.
Recruitment is something that takes time and something you need to get right. If this isn’t done properly the recruitment quality, process and output is poor. The customer can even be lost, together with all their social media friends. HR may seem like a stretch initially but it will be the most relieving, business improving move you will ever make. Once you reach 10-15 staff, you’ll need to invest in this department.
4. Financial management
It’s important to have good financial management from day one.
If you decide to engage an accountant, they should provide sound business advice, add value and not just complete your tax compliance but know your business inside and out.
5. Customer service
If you want to succeed this is something you’ll need to live and breathe. Provide your customers with a product that you and your team are genuinely proud of at a reasonable and justifiable price, and that doesn’t mean cheap. Then be there for them. If you screw up, fess up and make it right, no excuses.
Here is where you build that barrier to entry. So many start-ups have an innovative product, with beautifully presented, marketing material and ads sending them broke, when really what they’re avoiding is getting out there and knocking on doors.
You are generally cold calling somebody, whether by phone or by foot who doesn’t know they have a problem you are about to solve with a product they won’t initially want. It is demoralising but if you want to succeed and beat the competition, it is essential and until you have momentum, nobody will do it like you.
It’s a numbers game, the more calls you make, the more appointments you’ll get, the more face to face sales you’ll do and if you genuinely believe in your product, the sales will come. Back it up with great service and you will succeed.
It is expensive, it is frightening and it is fun. Stay with the sales part until you have some momentum, find a young hungry agency with like minded people and stick rigidly to a budget.
8. Fund raising
Time consuming, energy depleting, expensive, demoralising, focus diluting andsoul destroying. These are a few of theupsides to this pursuit. The process of fund-raising invariably starts too late, takes three times longer than you anticipate and often falls at the very last hurdle and you have to start all over again. Get ready for it.
If you have good financial management in place, it will alert you to the need for funding before you actually need it and give you a clear idea of your worth. Ultimately, making the due diligence process quick and believable will give you a stronger negotiating positioning.
9. Life balance
Your business will consume you and so it should. You will eat, sleep and breath this baby every day and night,especially if it is home based but you must try to find balance or risk the loss of friends and family. Plan breaks, book and pay for tickets, go away and disconnect. Stay healthy, eat well, exercise and party hard.
10. Competition is your friend
It is easy to loath your competitors but this means you are in a viable category that they’re trying to expand. If you focus on their achievements you will learn something, if you focus on their failures, it may feel good but you learn very little.
11. Leadership and the difference between winning and succeeding
Those who succeed realise without question that their success is due to the team around them. Suppliers, staff and customers feel and want to be part of that success and are acknowledged for having achieved it.
12. Knowing when to step aside
Most entrepreneurs are ideas people and dreamers but they are not good at execution. From day one be on the lookout for people who can do it so much better than you can and empower them to do it. The tendency is to feel that nobody will know your business as well as you door do things as well as you can but you simply cannot be good at everything. Find talent who can take the stuff you struggle with off your hands, be it financial management, logistics, IT, marketing, sales or even general management. Step out of the way and watch your life balance return.
There are no successful business people who got there without huge dollops of luck. Acknowledge it, appreciate it and never expect it.
Ok, so how do I know all this stuff? What book did I read and can I get you a copy?
Well, we learned everything above by making the classic mistakes in every category. Luckily none fatal but often really close. Be aware that no matterhow successful you are, you will never be completely out of the woods. Market disruption will see to that.
Greg Wilkinson has over 30 years’ experience in the computer software industry. Greg entered the industry in the early 1980s in London where he managed Caxton Software, which became one of the UK’s leading software publishers. Greg co-founded ASX listed accounting software provider Reckon in 1987 and also held the position of Chief Executive Officer through to 2006. In February of 2006, Greg was appointed to his current position of Deputy Non-Executive Chairman and became a member of the Reckon board of directors. He is also an investor and mentor to a number of cloud based start-up companies.