If you want to be an entrepreneur, there are a few things you should know before starting a business – actually, there are at least 10 of them. Knowing what they are, and how to implement them, will go a long way toward ensuring that your business venture is a success.
#1. Cash Flow Is Job 1
It may be fun and even interesting to get caught up in a lot of the details of starting a business, such as setting up an office, having stationery and business cards printed, contacting various vendors, and even talking with people about potential employment. But when you become an entrepreneur cash flow is Job 1. And that’s a relationship that you need to understand from the very beginning.
Simply put, without cash flow there is no business. Keeping cash flow coming in will be an ongoing challenge, but it’s never more important than in the startup phase. Before you can officially launch a business – in fact, before you can even say that you’re in business – you need to have some clients and some cash flow coming in. When you start your business, that should be your primary mission.
Related Article: 4 Ways to Increase Your Monthly Cash flow
#2. Focus Most of Your Time and Effort Doing What’s MOST Important
When you start a business you can get tangled up in a lot of details. After all, as a sole proprietor, virtually every issue in the business is your responsibility. But this is where focus becomes extremely important. You have to be able to separate critically important activities from those that are just merely important.
We just discussed the importance of cash flow, and that will need to be a priority for as long as you own your business. That can involve other important tasks in the same direction, such as marketing, customer/client contact, and product/service delivery. These are the foundation of any business, and they are the functions that you must get right.
#3. Don’t Hire – Partner or Sub Out Instead
When you start a business, you don’t need to hire employees. After all, employees create an immediate fixed expense at a time when income is uncertain. The better route is to either partner with other entrepreneurs for certain services, or sub out the work to independent contractors and freelancers. That will help to keep your expenses in check, especially during the startup phase of your business.
Related Article: 46 Insights On Partnering And Collaborating In Business
#4. Rent – Don’t Own – At Least at the Beginning
It’s almost axiomatic that you will need cash in order to start a business. But most of that cash will likely be needed for your personal survival. The less that you put into the startup itself, the more you’ll have for survival, and the longer that you’ll be able to last during the early days of your business.
That means keeping capital outlays to an absolute minimum. You should rent office space or storage space, as well as any necessary equipment. That will keep upfront capital outlays to a minimum, and “preserve your powder” for survival as necessary.
#5. Market Test Before You Commit
There’s no such thing as a can’t-miss product or service. No matter how good a product or service looks on paper, it can fail for any number of reasons that you never imagined.
Be sure to test market any new products or services that you are planning to roll out, that way you will minimize your investment in the project. It’s also always better to test run any new roll-out on a sample level, that way if it fails, it’s less likely to be fatal to your business plans.
Speaking of which…
#6. Be Prepared to Fail
One of the reasons why so many people are afraid to start their own businesses is because of the uncertainty that it carries. You should be prepared for that uncertainty, by being prepared to fail.
Perspective is important, and you will need to accept the fact that not everything you try is going to succeed. That makes a strong case for having a backup plan for anything that you attempt to do. The idea is to make sure that you have the resilience to survive a failure or two, without losing your business.
#7. Think Outside the Box
A new business never comes with a how-to manual. And if you are serious about becoming an entrepreneur, you’re going to have to be able to think outside the box. This is particularly true if your business represents something that is either uncommon or completely brand-new.
If marketing plans are running aground, be fully prepared to make adjustments as you go along. Where expenses are concerned, always investigate the possibility of finding a lower cost way to get what you need and to get things done.
Running a business is very much about managing scarce resources, and you will have to adopt unconventional ways of thinking in order to do that, particularly if you have never been in business before.
#8. Have Plenty of Cash Reserves
For starting your business, you should have sufficient cash reserves to pay your living expenses for at least six months. A full year would be even better. Since your business is unlikely to have much of a cash flow in the early going, you may have to rely on those reserves in order to live.
It would be even better if, in addition to your cash reserves, you already have at least a small cash flow before you leave your current job. This will make you less dependent on your reserves, and also give you more confidence of success in the future.
#9. Network With Other Entrepreneurs
One of the best ways to become a successful entrepreneur is by becoming friends with other entrepreneurs. Starting your own business is a journey that is never good to take completely alone. If you network with other entrepreneurs, you’ll have other people who are in the same situation as you, and who you can turn to when you need quick answers or maybe even some brainstorming.
Networking can provide you with something of a personal support system, as well as an opportunity to grow your business through partnerships and joint ventures in the future.
See Also: Tips For Business Networking At A Conference
#10. Never Give Up!
Starting and running a business is a long-term commitment. You have to be ready to tough it out, no matter what obstacles you hit. Though you may find yourself doing little more than simply surviving in the early months and years of your business, that experience will be critical to the long-term success of the business. The lessons that you learn during the tough times are often what will give you your edge in the future.
Before Starting a Business: Final Thought
If you can get these 10 strategies in line before you start your business, you have an excellent chance of surviving and thriving.
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About Personalincome.org
Personalincome.org was founded by Donny Gamble, a published author and investor. He graduated from The Ohio State University and has a passion for teaching others about alternative investment and retirement strategies. He is also a contributor for Huffington Post and has been featured on Yahoo Finance as well as other personal finance websites.
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