Seven Essentials to Start a Business: get them on the drawing board Right Now!
You should open the doors for business as soon as possible. The sooner customers buy and use what you offer, the sooner you will be testing your ideas for real. Market research or prototype making may refine your ideas, earning revenue–or not, will give you real guidance.
To get yourself in a good space before you get too much further, I suggest that you take a look “Five Habits to Help you Start“. The ingredients you are going to need are:
- Dreams… you’re going to change the world;
- Data… you need to know where you are going;
- Dollars… without them you are not in business;
- Doggedness… it will never be like you think,
AND, there are some other things you need to consider very carefully before you start.
1. Understanding Entrepreneurship
Before you move on from thinking that you might like to start a business, it will be a good idea to consider whether you have the characteristics likely to make for success.
It is not an easy road to take, but if your passion is driving you in that direction, you will probably find that you cannot avoid going that way.
It’s best to work through the disadvantages of entrepreneurship, so that at least you can calculate the downside risks of starting a business.
Go to Understanding Entrepreneurship for several ways of considering if you have what it takes.
2. Think Strategically
You should have your sleeves rolled up and hands in the dough, but be sure that you have a vision of what the cake should look like.
Strategic thinking is more than just writing a strategic plan and the secret for entrepreneurs is to live the vision now.
Use active words in the present tense to describe your new business or nonprofit. Even if you have nothing to sell this minute, feel like you have.
Go to Strategic Thinking for some practical ways to adopt this style.
3. Know Your Purpose and Goals
What is the real passion behind your idea? Be clear with yourself, even if you don’t articulate it to the outside world. What drives me is that
I am committed to the idea that creating a new business or nonprofit can change the world. I am a business person, not a politician.
You need to be fully honest about your purpose. That does not mean that you should not be making money, but it will be entirely transparent if that is all you aim to do.
Reflect and discuss your purpose with trusted friends of colleagues. You nay be surprised at how they can reinforce your feelings. Sitting on your own, you may think your ideals are pretentious. If they are well articulated, you will find an echo–maybe not from the whole world, but from the audiences you seek to impact.
To find some frameworks for this difficult process, go to Purpose and Goals.
4. Understand Your Value Proposition
You are likely to have heard the term ‘value proposition’ and have been confused about what it really means. Put at its simplest it meansto determine what customer problem you aim to solve and the value the customer is going to get from what you offer.
It is a first priority task for the entrepreneur because the market is too crowded for just another widget.
Your value proposition will guide not only the way your establish your business model, but also your business plan to bring it to life and the marketing strategy that you will adopt to achieve your purpose and goals..
Your value proposition will need an assessment of your capabilities, resources, experience, commitment and honesty. To find out how to do this go to Value Proposition.
5. Define Your Business Model
You need to figure out how your idea is going to work: this really is one of the six essentials to start a business. The business model will involve:
- defining and differentiating your products;
- acquiring and keeping customers, creating utility for them;
- how you get to market: promotion & distribution;
- how you define what’s to be done;
- the way you will set up your resources;
- and above all–how you’re going to do all this at a profit.
Getting your business model right at the outset will give you confidence, even when the going gets rough, as it surely will. Of course some of the variables will change as the internal and external environments do. You can be assured of change in business, as in life.
6. Match Ends and Means
If the means you intend to use to get your business going are not matched to the ends you intend the business meet, you will quickly be ‘found out’. It is important to anticipate how you may have created inconsistencies.
All too often a business will set out to create high customer satisfaction, but in delivery it falls short. An example could be a company that claims to ‘put the customer first’, but has a policy of only offering credit for returns and not cash. Another example could be a business in financial services that claims to offer the ‘best deal’ for customers, when its senior executives do not disclose the full extent of their earnings.
Business is a process and all its parts have to be aligned in order to achieve consistent success. It may be that policies are created with the best of intention, but their execution is overly much weighted in favor of the supplier at the extent of the customer, or more in favor of the employer than the employee. The interest of both parties have to be balanced.
Mistakes do happen, but it is more sensible to check out the balance between means and ends.
7. Create Urgency and Maintain the Momentum
Do not rest on your oars as soon as you have set up the business. Entrepreneurs sometimes face a block about priorities or what to do next. A friend of mine, Mark Hurwich of Concentrated Coaching has a special service for you to reconnect to your purpose.
In the golden age of North Sea fisheries, I had a trawler fleet client, and I remember the boss who greeted one of his skippers on pay day after the fisherman had landed the biggest catch in his port’s history, with the words, “Now go and catch some f…..g fish!”
You are only as good as your last voyage.
- Make sure the strategy is compelling—share it
- Be convincing about what you’re doing—win people over by telling a good story
- Go for incremental wins, you can’t eat an elephant in one bite
- Don’t loosen your grip—keep on top of progress/stay in touch with reality, and
- Follow-up and follow-through.
Everything always changes. You cannot afford to be asleep at the wheel. Be sure to create urgency and maintain the momentum.