The truths about running a business: What every startupper should know
Everybody has their two cents, and it’s easy to get lost in all the business advice and recommendations that are out there. While there are a ton of "musts", the insight about what not to do is of equal value. Being prepared for every scenario will not only save you a lot of time and resources but also make you better prepared for any kind of hardship along the way.
As 20 percent of new businesses fail during the first two years of operation, and roughly half of all companies don't survive the first five years -- what will reverse these unfortunate statistics? Here are my do’s and don’ts of running an independent business of any size.
KPI's, the 4 P's, and socialization: The do’s
First and foremost, do your market research and draft a business plan to test your idea(s) before launching. It is in the beginning stages you build the foundation for both your company and yourself as an entrepreneur.
It goes without saying that the more groundwork you do, the better you understand and define clear KPIs for your business and thereby prepare for the marketplace you are entering. Doing this homework will ultimately result in better personalization, originality, and uniqueness to your brand.
Be clear on what your four Ps are: product, price, promotion, and place. These four indicators are crucial in setting clear revenue and profitability goals.
Implement the right tools and action plans for your growth strategy: market share, new markets, diversification, acquisition, acquiring a franchise, partnerships, or just plain old marketing. Whether it’s your communications and marketing approach, or an expansion in developing new products, the right tools will help grow your business.
Finally, you should put your energy into cultivating every personal and professional relationship that comes your way. Whether it’s a potential customer, a supportive friend, or a possible collaborator—every person can contribute something valuable to you personally or your business. So, socialize and be visible in your business community. If you are not out there physically, I can guarantee you that your product won’t be as visible to your audience as it can truly be.
Overachieving and tunnel vision: The don’ts
If you suspect that you are moving too quickly, pump the breaks and consider some of the following important metrics. Hiring the wrong people, spending too much time or too many resources in the wrong areas, or being too rigid about your company’s roadmap are common startup mistakes, especially when things start going well.
Believing in yourself and your product is not necessarily a bad thing, but not if it makes you tunnel-visioned. You should never let doubts or fear prevent you from changing ideas, business objectives, or direction. Try and stay grounded by being aware of the realities in the industry you are operating in. It is quite rare that what you foresee in the beginning will stay with you throughout every phase of your business, so it is vital to know when to evolve.
Overdelivering also belongs here. It’s easy to jump the gun when things are going well and you start seeing the sales curve escalating. Ensure details like timely delivery to current customers and every stakeholder in the supply chain before raising the volume. Ambition is good but make sure you are in the rhythm before taking your business to the next level. Steadiness and consistency will serve you internally and externally, translating to reliability that builds a reputation for any business.
We all know the cliché phrase, "Never mix business with pleasure." But here’s another variant for you. Don’t see an opportunity everywhere and in everyone as in thinking every investor, venture capitalist, or family member will invest in your product. Be selective about where, how, and from whom you seek funding. Think long-term instead of what you can get in the "here and now" and focus on what you can do to encourage investors to be on your team. This will encourage individuals to be loyal to you in the future as a true networking reward.
Find ways to delegate and don’t do everything yourself. Hire a legal expert, and while you are at it, maybe even an HR professional or a financial manager to understand the risks. Remember, the younger your business is, the harder it is to envision the bigger picture, and some risks are not worth taking on your own. This approach will ultimately prevent your company from a myriad of detrimental pitfalls that could occur down the road.
Two sides of the coin: Personal and product benefits
It's easy to get lost in all the planning, budgeting, and organizing whether you are a new or experienced business owner. It is natural for new business owners to focus solely on their market and submarkets, product development, and specific audience -- but I encourage you to lift your head and really see your surroundings.
Pivoting cannot be underestimated because learning from others and networking as much as you can is aligned with the following movements in the industry you are operating in. This is called social learning, and LinkedIn reports 94 percent of employees prefer this learning method at a company. Essentially, every single person you meet has the potential to bring something valuable to your business and vice versa. Adopting that mindset will pay out in spades, making you a stronger entrepreneur in terms of leadership and enhancing your brand.
Image credit: V.S.Anandhakrishna / Shutterstock
Lesley Pyle is founder and CEO of Hire My Mom