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For entrepreneurs, time is one of the best teachers. It sounds like flatness, but with 90% of startups destined to fail, it’s also true.
To be one of the 10% of companies that become truly legitimate, you have to be very dedicated and spend a lot of time. But for those of you who are considering starting a business for the first time, here is a checklist of things you should understand before you get started.
1. Carefully analyze your barrier to entry.
It goes without saying, but it’s amazing how many young founders are taking the plunge when it comes to analyzing the market in which they want to do business. We’ve all been there: you think you have such a good idea for a product or service that aims to disrupt the prospect market that you want to break into – no matter who you compete with.
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The best advice I can give to people determined to start their own business is to slow down. Take the long view.
Start by analyzing your prospects for entry barriers. What are the minimum capital requirements that companies are expected to meet in order to be competitive in your market? If your business model is based on e-commerce, do you have to pay the initial costs for an e-commerce software platform like Shopify, or is your space niche large enough to grow (for now ) with a Squarespace retail site?
If you don’t want to start a digital business – let’s say you want to start an artistic moving business – do you need to have access to distribution channels (such as moving trucks) and if so, are there other companies that block your access to these resources?
These are all types of questions that should cross your head before you commit to starting your own business. The most common way to resolve barriers to entry is probably to create a SWOT (Strengths, Weaknesses, Opportunities, Threats) table. It may sound a bit complicated 101, but it is a useful method of visualizing where you will be having problems.
For example, suppose you want to start a tech company in New York that creates websites specifically for startups. The fact that there are a lot of startups needing websites in New York would be in the “O” category on your chart. However, the fact that web development is such a saturated market in New York means that you would have many threats to the success of your business, which obviously would fall into the “T” category.
2. Be open to do anything.
Even if specific tasks such as finance or marketing are not really your strong point, you had better get to know the operations in different vertical sectors and quickly. If you can’t imagine trying to sell or deliver, it may be time to decide if entrepreneurship is really for you. There is no shame in not wanting to manage different types of workloads, but the bottom line for startup founders is that you need to be able to work in a team of one person before you can be successful.
When you are your own boss, no one is going to sit down and tell you that you have to put next month’s pipeline in the spreadsheets. Likewise, no one is going to sell the strengths of your business better than you. Being a successful entrepreneur is much more than wearing five different hats at once. This is to prioritize the hat to wear when, and not to get caught by wearing only the hat you prefer.
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3. Don’t be afraid to make imperfect decisions.
Even after the success of your business, imperfect decisions are the best we have ever gotten, but this is especially true for founders of startups who base most of their decisions on imperfect data. In the end, you should almost always make a decision as soon as possible.
One great thing about startups is that, by definition, they are very skinny, which makes pivoting easier as it will usually take you a while to find a space in the market that suits you. That being said, the biggest killer of startups makes no decisions (that and makes unforeseen and illogical decisions).
Suppose you operate an online luxury retailer, but you cannot decide to start selling your products at the average market rate to start or just below the average market rate. Since you are new to the block, these are not necessarily bad decisions depending on how you plan to grow your business. Let’s also say that you have a fixed amount of capital to spend in your first year of business, but you don’t know if you should spend it on marketing – which would allow you to develop your brand and possibly allow you to sell your products. at current market value – or if you want to spend the capital of your year to hire more employees, such as customer service representatives.
No one will make such decisions for you, but if you don’t know which decision to make, you will stagnate as long as this 900-pound gorilla stays in the room.
4. Learn from the mistakes of others, including your own.
This is probably both the easiest and most difficult advice to implement in your start-up planning.
Everyone had a boss who made a decision and thought, “I would do it differently.” You don’t have to be an entrepreneur to think that way, but the best-performing entrepreneurs don’t do not stop making simple judgments. They go the extra mile and really analyze the mistakes others make and synthesize their own solutions.
Any type of workspace you can think of can be a training ground for starting your own business, but you have to be careful and ask yourself not only why you do things differently, but how you would do it differently.
But you cannot just learn from the mistakes of others, you must also learn from your own mistakes. This is where the attention to detail inward becomes most critical. If you are starting your own business for the first time, being able not only to admit when you have made a mistake, but also to learn from it, can be the most difficult testing ground for any entrepreneur.
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