An entrepreneur is someone who jumps off a cliff and builds a plane on the way down (Reid Hoffman). When you are kicking off a new business you will take some risks. However, if you follow these six tips, standing on the edge of that “cliff” won’t seem quite so daunting and you’ll have the tools you need to take the leap.
- Have an inspiring (but realistic) plan. You need to begin with the end in mind as Stephen Covey author of “Seven Habits of Highly Effective People” says. You must articulate what you want to achieve and how you’re going to do it. Plans will need to adapt as you go, but you have to start with your end goal in your sights.
- Prepare a budget and use it. Too many businesses start off with some cash or an overdraft, and hope it will be okay. Budgets are challenging but they are an essential tool. You need to understand your income, expenses, your profit margin and your breakeven point. Importantly, you need to plan and monitor cash flow. Focusing on profit without managing cash flow is like going for a drive and keeping your eye so closely on the speedometer that you don’t realise when you’re running out of petrol. Use accounting software to your advantage.
- Have a support team. Don’t rely on what you hear from your mates at the pub. Instead, surround yourself with advisors like accountants, solicitors and HR experts who can ensure you know your legislative requirements and get your structures right from the beginning. Successful entrepreneurs will also have family support, business networks, mentors and friends who will help them manage challenging times.
- Hire the right people the right way. People are not your most important asset – the RIGHT people are. It’s important that you hire for attitude, not just skill. Find people who will uphold your values. As Jim Collins (author of Good to Great) says “get the right people on the bus, the wrong people off the bus, the right people in the right seats”. First the people, then the direction.
- Understand your point of difference. Remember that your business must be solving a problem for people. Look at your business from your customer’s view point and remember to ‘sell the sizzle, not the steak’; that is, sell the benefits not just the features. For example, McDonalds doesn’t sell burgers, it sells convenience. Nike doesn’t sell shoes, it sells the promise that you can ‘just do it’ and your potential will be unlimited. Keep focussed on how your product or service makes your customer’s life better and make that your point of difference from your competitors.
- Embrace your passion. Choose a job you love and you’ll never work a day in your life. As Richard Branson says “When you believe in something the force of your convictions will spark other people’s interest and motivate them to help you achieve your goals. This is essential to success”.