Although I am admittedly young and arguably somewhat new to the world of entrepreneurship, I have a good head for it. Most of my experience lies in the world of restaurants — the service industry. But let me tell you this now, if you can make it in the restaurant business, then you can make it in any business. In fact, the reason I got out of the restaurant business is because for the amount of time and effort that is required to build and to run a successful restaurant, one would expect a much heftier payout.
There are plenty of opportunities out there that will require less initial investment, less monthly overhead and fewer hours of physical work. I’m not trying to deter anyone from the restaurant industry, but if you are like me and want to make money most efficiently with the time that you have, then I suggest you look elsewhere. The first step towards becoming an entrepreneur is not learning all the ins and outs of the business world.
There is no reason to start reading up on economics, statistics and business 101. Truth be told, business is not rocket science — it’s much, much simpler than that. Before you start reading up on how to manage employees and how to best reinvest your money, first focus on making the money.
1. You Don’t Need A Business Plan; You Need To Brainstorm
Every good business starts as an idea — or rather, starts as a problem. If you want to start a lucrative business, then you need to pinpoint a problem that people are having, a problem that you can fix. You need to find a market. Businesses often fail because their founders believe themselves to have found a market that simply does not exist or doesn’t exist in the proportion it was believed to. It may be a good idea to take a look at some of these failed endeavors — you may be surprised to see what didn’t work. For example, take a look at something called the Segway.
Once you do find what you believe to be a potential market, consider if the market is large enough for you not only to be able to cover your costs, but also to turn a nice profit; if you’re not going to be making a profit, then why bother going into business? Don’t bother making a business plan because they never end up being worth the paper you wrote them on.
2. Do The Reading
I will assume that most of you reading this do not have an MBA. In fact, I hope that most of you don’t because in all honesty an MBA is pretty much useless. The only reason, in my opinion, that anyone should spend the time and money on an MBA is for the networking — and that’s only if you plan on attending one of the top schools in the world. Otherwise, everything that you would learn in a classroom, you can learn by picking up a book -- well, several. The most knowledge that you will receive is from the experiences you have while already in business.
Everything that you will learn in either school or from books will be methods and general principles, which will help in the long run, but are not necessary when you’re first starting off. I would recommend beginning the brainstorming process and possibly doing market research before delving into the reading. Your best option is to do so simultaneously. Business is a lot like school; you’ll be best off when you know everything that there is to know on the subject.
3. Market Research
The goal of every business is to turn a profit. If making money is not your priority, then you should not be delving into the world of business. As the old saying goes: It takes money to make money. But before you decide to cough up the cash needed to start your business, make sure that the market is as hungry for your product or service as you believe it to be.
You don’t want to invest your money before you know that you have a viable product or service to sell. Let me say this to start: no one will love your product from the start. In fact, if they do, they are most likely lying to make you feel good. For this reason, I recommend doing market research outside of your circle of friends and family. Your product will need improvement; it always needs improvement. However, as long as you are fixing a problem that the customer wants fixed for a price, they are willing to pay to have it fixed, then you are headed in the right direction and can spend time focusing on tweaking your offer.
I recommend Shadow Testing. Build a demo product in some sort of physical form that others can take a look at and have a general idea of what it is that you are selling. You can quickly make a website with minimal cost that will present your product and/or service to consumers. You can have a questionnaire that asks what they like about the product and what they would like to see improved.
You should then add an option to order your product/service on the spot before you even have something to sell. Pre-ordering is great because not only do you know how many people would be willing to buy your product from the get-go, but you’ll also start the most vital process in the world of business: making sales.
4. If You Don’t Sell, You Don’t Survive.
I believe this to be a no brainer, yet too many new entrepreneurs take it for granted. You need money in order to run your business. You need money in order to survive as a company and for you yourself to survive as an individual. As an entrepreneur, your first and main priority is to start selling. Sell as soon and as quickly as you possibly can.
No matter whether you are unhappy with what you are offering or not. Too many people wait until they believe their service to be perfect; it’ll never be perfect! Your goal is to start bringing in revenue as soon as humanly possible. Once you are already selling your product you will learn what is working and what’s not. Your customers will inform you on what they like, what they don’t like and what else they would like to see you offer.
Grow your business from your customers. The things that you like are often not what the customer wants to see. Never forget that you created your company to fix THEIR problem, not yours. Sell, sell, sell, sell. Then tweak (while you’re doing more selling).
A business is a living, growing thing. It cannot remain the same for an extended period of time because it must change and adapt to changes in the market and customer preference or otherwise see a plummet in revenue. While much more can be said about becoming an entrepreneur and on starting a business, these are the key points to keep in mind. What problem are you fixing?
Do enough people have this problem? Are they willing to pay more than the minimum price you’ll have to charge in order to break even? Will you be able to deliver on the promises you made your customers? Starting a business is easy. All you need to do is apply for one with the state. If you want to keep things simple, then contact Legal Zoom; they’ll set everything up for you for a reasonable price.
Creating a successful business takes time, patience and knowledge. Consider mistakes to be experience — but avoid making them whenever possible. Read up all you can while you’re already selling. Don’t wait until you have a perfect business plan or product because they don’t exist. Avoid partners and VCs because they will be pains in the ass sooner or later. Other than that, never take your business off your mind; make it your life because that’s what it takes to be a successful entrepreneur.