~by Hannah Whittenly~
Every great business starts with an idea that evolves to become a bunch of great ideas. But what entrepreneurs do from the time they conceive an idea determines whether their entrepreneurial venture can become successful.
Here are five ingredients of startup success.
1. Do Your Homework
The first thing you need to do is get to know if your idea if indeed viable. Research online, talk to experts and visit conferences in your industry with a leading objective of wanting to know whether you are the first with this idea. Your next objective should be getting to know if there is another person with a different plan that can address the same problem.
2. Know Your Customers
The sole objective of any entrepreneur should be designing a project that sells. To do this, you need to understand your targeted customers, their current needs, their lifestyle, and their purchasing power. Based on your findings, try to foresee the upcoming demands and design a plan that can better meet those needs.
3. Determine your Resource Requirements
Get to know what exactly you need to get started. If you can build it in your basement using easily available materials and tools, then you are set to go. If you need a co-founder or founding team, you need to start looking at the right ones. If you aim to own 100 percent of your startup, you’ll need deep pockets. You can still consider taking a commercial loan or taking part in crowdfunding programs to secure capital.
You still have to decide the form of business that you want, whether a sole proprietorship, partnership or corporation. Remember some brilliant business ideas fail to see the light of the day simply because of a lack of the right resources and the right partners. Expect to spend a substantial amount of time in this area.
4. Write Your Business Plan
There is so much to think about when it comes to your business plan. You need to evaluate where you have come from and where you are now. Doing so will allow you to make a realistic estimate of how far you can go and what goals you need to set to get there. To help you come up with your own goals, try and answer some of the following questions:
- On average, how much more profit are you making every month this year than you were last year?
- Are you spending more on your company than you’re earning?
- If you haven’t reached the break-even point, when do you expect to reach that point?
- How much in debt are you and your business?
- What product does your business provide that is the least cost-effective?
Take the time to answer each of these questions honestly. By answering each question and coming up with solutions, you’ll know what area of your business you need to focus on the most to help it be successful. Of course, coming up with the answers to all of these questions may be tough. If at any point, though, you find yourself struggling with the overall financial analysis part of it, don’t hesitate to contact a professional.
5. Be Open Minded
The entirety of this process, including preparing a detailed and practical business plan, is very costly. Unfortunately, this plan is not a casting stone. It is critical to maintaining flexibility in it. Pivoting is always an option for many businesses that want to thrive. So follow new opportunities wherever they may lead you. We can learn this lesson from Tracy Rawle, a CEO of Check City. He rose to become the manager of his father’s two restaurants. Later in the course of their operations, they found it prudent to sell these restaurants and enter the financial services business, which is performing very well today.
Learn the trend that your business is taking. You can do an annual review to get to know your performance and then update your goal sheet for the following year, reprint it and redesign it. Where possible, keep the old goal sheets to enable you to accumulate several successive annual goal sheets for long-term decision making.
The odds of your dream not being fulfilled are indeed fairly high, but you can succeed if you do adequate research, have the right resources, create a comprehensive business plan, and remain open to new ideas. Getting over the startup challenges is a common trouble that many up and coming entrepreneurs face.
Meet the Author: Hannah Whittenly
Hannah Whittenly is a freelance writer and mother of two from Sacramento, CA. She graduated from the University of California-Sacramento with a degree in Journalism.