Entrepreneurship. It’s a loaded term. An entrepreneur is any person who sells a good or a service for a profit. This can be starting a small business or starting a freelance (i.e. photography, writing, drawing, design, etc.) operation. Entrepreneurship is identified as any endeavor in which an individual sets out to make money off of selling goods or services provided to a client. This can include talents a person has. Entrepreneurs generally assume all of the financial liabilities, and invest their time, monies, and efforts into starting the company or business. This can be risky, but it can also have massive rewards when it’s successful. Below are seven (7) tips to help make it more likely that an entrepreneur will succeed in his/her endeavors:
1. Traction: Traction will help you be successful with an entrepreneurship attempt. Grand ideas no matter how great they are rarely get funded. Lay out a business plan for your product or service that is practical and possible as well as plausible before seeking any investors for the idea you have developed.
2. Quality Product: A perfect product will not be an immediate guarantee and perfection should not be the main focus either. Getting your idea or creation in blueprint form is one key step towards establishing a quality product. Then describe all the features the product should have. What should it do? How should it do it? Once you have the main concept together you can contact different manufacturers to see who is likely to be able to produce a prototype if you cannot produce one by yourself. Once the prototype is built, then it is important to meet with those who will be your potential customers in the future to gather information about their thoughts and feelings on the product.
What is liked about the product? What is disliked about the product? What needs improvement? Is the value good for their money? Don’t be discouraged by constructive criticism. It will take several prototypes to fine tune the product, and many more to “perfect” the product. Keep in mind that no product is ever “perfect”, but the idea is to offer the highest possible quality to the customer. Initially, however, it’s OK to have a less than perfect product – you just have to be willing to improve it.
3. Deliver Value: Remember to put priority on the value delivered to the customer. You want to provide the best product on the market to meet the needs of the most people at a reasonable price. If your product does not help solve a problem for enough consumers, and do so in a better way than the products that are already on the market you will never be successful.
4. Know Your Market: Some companies can tell you how important this is firsthand. Some of the most recent casualties of ignoring this were just from 2015. One of those such failures was a product known as Quirky. While most of Quirky’s products were only slightly profitable if at all profitable, one product is what is said to have ultimately brought the company down. This product was a $400,000 investment Quirky made in a new Bluetooth speaker system that never sold more than 28 units. Yes, 28 units. It was the company’s downfall. All that despite a $185 million in initial investments being raised. Another great example of a failed startup was Grooveshark which began in 2006 as a site for people to upload their own music to for others to listen to. Grooveshark was taken down despite $6 million plus in initial investments from other companies due to being overtaken by larger, more profitable music-streaming programs such as Spotify, iTunes, and Google Play. The larger corporations site ignored the company’s model because there were too many copyright infringement risks coming from people uploading their music to the platform without a regulation policy on the music’s use. A lot of lawsuits were filed and the model was deemed too risky. Finally, another company that 2015 saw go “belly-up” was Leap Transit. Leap Transit started in San Francisco off of a $120 million worth of investments by various donors. The concept was to provide a bus service independently run from the bus system of the city. However, in the end the $6 one-way ticket proved to be too costly for even the wealthy suburbs of San Francisco where living costs are traditionally sky-high compared to many other parts of the country. The paltry $20,748 profit the company made in its first year wasn’t enough to keep the enterprise going, and the entire thing collapsed.
5. Customer Retention: Focus first and foremost on retaining clients over getting new clients. Retaining clients who give your product a chance in the first place is the most important part of running a successful business. Remember not to alienate these customers. It’s always much harder to persuade a new customer to give your product a try than to keep an already-satisfied client happy.
6. Quality over Quantity: Do not obsess over the scalability in the initial days over gaining loyal customers in the business’s earliest days. Don’t worry about scaling up production until customer demand grows. Companies do not fail because they cannot produce enough products, they fail because people will not buy the products they produce. There will always be a manufacturer that can produce more product on demand. The catch to any successful business is finding people who desire to consume that product.
7. Experienced Personnel: Avoid hiring only newbies for positions within your corporation. While giving the “new guy” a chance is a great idea, and an OK part of any business plan, it’s also vital to have experience on hand when starting up a new company or business as well. Experienced workers will require higher salaries, but it’s a move that will pay for itself in the end with increased sales, more productivity, and a smoother upstart than just hiring people who are inexperienced and only beginning to learn. That’s important after all as you are protecting your bottom line and investment in the company.
8. Be Patient: Success will not be immediate or overnight. Success is actually not guaranteed at all. In fact, very few entrepreneurial endeavors ever become “big businesses”, but many are still very successful and self-sufficient operations. It takes a stream of steady-paying customers and some time and effort to build up a customer base that can be sustainable. Never give up just don’t expect to be driving a Corvette overnight so-to-speak.
Take risks when it comes to entrepreneurship, but take smart risks. If you are investing in a business partner, do it with someone you know and trust. Only take out loans you are confident you can pay back with any moderate amount of success. Always be sure to offer a quality product or service, do honest work and be upfront with customers. Charge customers a fair, competitive rate for the value of the work done. It’s vital that you make a profit, but also expect to deliver the quality they are paying for. They do not want to feel “cheated” or “used” in the end. Dream big and give your own product/invention or service a try. If you have thought of a need for a product, then likely someone else has wished they could purchase or receive that service. Being an entrepreneur is the only way to find out if your product, idea, or service will sell. Try it out and you never know what successes you may have along the way.
Image Credit: Pj Accetturo, Unsplash