Many budding entrepreneurs are filled with much ambition and passion, but they may lack the experience and knowledge on how to effectively run a company. For this reason, many often experience their fair share of failure when starting out in an industry. To ensure your success from the start, here are nine practical tips every entrepreneur must read before launching their first business.
9 practical tips every entrepreneur must read before launching a business
Understand Your Cash Flow
There is a big difference between cash flow and profitability. Yet, many aspiring entrepreneurs often get the two confused, as reportedly 90% of small business failures are a result of a poor cash flow within the company. Your business can generate a profit, but you can run into financial difficulty if you haven’t got a handle on your cash flow, which is the total amount of money that will flow both in and out of the company.
Dare to Be Different
You don’t want to become your competitors. No matter how much you admire their branding or business model. To ensure your success in the market, you should carve your own identity to stand apart from your rivals. To do so, you must dare to be different, which can increase engagement and generate sales.
It’s also critical not to make the mistake of targeting everyone when running your business. Define your niche in the market so you can target a specific demographic, who will engage with your unique brand and business.
Continually Educate Yourself and Your Employees
Do you want to dominate a market? You will need to learn everything there is to know about your industry. You might have a great idea and a profitable business, but that will not ensure your success in the long-term. Customer demand can change quickly, forward-thinking competitors will emerge, the economy can shift, and there will be legal changes that can, directly and indirectly, affect your business.
Continual education is, therefore, essential for both you and your employees. With the advent of technology, furthering one’s education has been made easier. Well-respected institutions have made various course offerings available online. You can take up an RMIT online course right at home and be able to do so while still juggling other responsibilities. Not only should you read industry textbooks and articles, but you should attend various events to increase your knowledge to run a productive, forward-thinking and compliant business. For example, ensure you maintain your excellent reputation within your chosen industry by attending ASSE (safety.asse.org), which is an annual occupational, safety and health conference, which can boost your knowledge of risk management, workers’ compensation, product safety, environmental management, plus more.
Recruit the Right Employees
Business owners place a great deal of trust in their employees, as they ultimately determine the company standards, productivity, customer satisfaction and, in turn, profitability. Hiring the wrong people can, therefore, be detrimental to your business. If you want to ensure your organisation’s success and longevity, you must hire the right employees from the start. Don’t recruit a candidate because they are cheap. Hire talented individuals who can help your business turn a profit almost immediately. For example, an experienced sales representative could generate more clients than the price of three, so it might be worth paying a little more to receive a return on your investment. The right people in the right positions will ensure your business is a force to be reckoned with from the get-go. Remember, it takes outstanding people to create an outstanding company.
Never Fear Failure
What’s worse than failure? Giving up. Don’t allow a fear to stop you from launching a new company. You don’t need to be fearless to be an entrepreneur, but you should never allow fear to stand in the way of launching a business. There is a misconception that entrepreneurs don’t mind taking risks, but they only take calculated risks. So, learn about the market, understand your cash flow, find your niche and get to work.
Create a Well-Thought Business Plan
Planning and strategising could help you become an industry leader. That’s why you must create a well-thought-out business plan to identify what you want to do, how you’re going to do it, and the goals you need to meet within the next one, two, and five years. A business plan will not only provide you with a plan of action, but it is an essential component when applying for a small business loan or private investment.
Build the Right Company Culture
Customer service should be at the heart of your business. If you want to treat your customers well, you must start by treating your staff well. You should build the right company culture from day one to ensure your staff feel passionate about both their position and the business, and feel motivated to come into work every day. Encourage independence and individuality within the workplace, so the staff are free to be who they are at work. You should also recognise achievement, cheer people on during a project, and encourage friendships both inside and outside the workplace. It could be enough to maintain employee happiness and retain your most talented members of staff.
It is important to relinquish some of the control of the business to your staff. Yet, you might struggle to let go of important projects when starting out. You must, however, put your ego and concerns to one side, and realise your staff members are just as capable of completing a task. It’s the reason you hired them in the first place, so start delegating. Trust your employees will put their heart and soul into a project so that you can focus on other areas of the business.
Have a Plan B
Who knows what the future holds for your business or industry. You can, however, plan for the worst to ensure your business can make a swift recovery following a recession, cyberattack, or health and safety breach. Every entrepreneur should always have a Plan B in place, which will ensure their company’s survival. While you might not ever need to use a contingency plan, you’ll be glad you had one in place if the worst should happen.