When you ask an entrepreneur for their advice on starting a new business, there are some words of wisdom that crop up time and again. Take a look at our top ten list to find out how you can avoid the pitfalls.
1. Pick what you love
When you set up a new venture, it will eat your life. If you don’t love what you’re doing, you will not be able to hack it for long – and you’ll lose out on business to competitors who do. Rather than focussing exclusively on what will (eventually) make you money, come up with a business idea that you are genuinely passionate about.
At first, it’s tempting to say yes to everything. But knowing what you do also means knowing what you don’t do. That doesn’t mean turning your nose up at work because you think it’s beneath you, but it does mean taking care not to let yourself be derailed by “opportunities” that don’t fit your ultimate goals.
3. Understand your market
A common mistake is to target your product or service at everyone. But “everyone” isn’t a market. Figure out who your niche is, figure out how they think or behave, and then figure out how you can best position yourself to capture their interest.
4. Use free resources
There is a wealth of free information, tutorials and even software out there that can help you with all areas of your business, be it accounting, marketing or strategy. Government websites often have extensive information available on financial and other support that’s available to small businesses in your country, and can clear up many of the myths and uncertainties that surround setting up a business.
5. …But find a mentor
Whilst the free stuff will help you with the practical elements of running your own show, nothing beats the insights of someone who has done it all before, understands your business and has nothing to sell. Find someone like that who is happy to offer you guidance and you’ve really struck gold.
6. Watch your cashflow
Whatever you do, don’t waste any money you don’t have to. In the early days, every penny counts, so don’t go splashing cash on extravagant lunches, flashy office space or paying suppliers to do things you can do yourself. Apart from the fact that a little financial cushioning could save you if things take a nasty turn, keeping an eye on the numbers and your hand in every part of the business means you will know it like the back of your hand – giving you an early warning system if things start to go wrong.
7. Do your admin
You must be properly registered. You must make sure you have the right kind of insurance. You must submit your tax return on time. Don’t let a great idea fall apart because you haven’t fulfilled basic legal requirement – research what you need to do, put key dates in your calendar and don’t forget to do the dull stuff!
8. Perfect your elevator pitch
You never know when you might have to explain what it is you do. You might be introduced to someone at a party who turns out to be the perfect client. You might get an unexpected phone call from a major company that really puts you on the spot. Make sure you have a succinct, interesting, everyday language explanation up your sleeve that can be delivered in under 30 seconds, without making you sound like a recorded message.
9. Stay healthy
As cheesy as it might sound, you are your new company’s greatest asset. Look after this asset. Feed it decent fuel, take it out for regular exercise to make sure it doesn’t rust over and give it plenty of downtime so it doesn’t overheat and explode. If you risk getting so burned out that you can’t do the job properly, your business may crumble.
10. Know when to let go
Just about every successful entrepreneur has a string of failures behind them. Sometimes you will look at what you’ve created and realise that it just isn’t going to work. Perhaps it won’t scale. Perhaps your market just doesn’t get it. Whilst start-ups take a ton of work to get off the ground, there’s no sense in pouring money and energy into something that you know in your gut is doomed. Learn when it’s time to shut it down and try something better.