By Keith Orlean
Starting a business from scratch can be an exciting and fulfilling experience, but it can also be a challenging and overwhelming one. As someone who has started multiple businesses throughout my career, I understand the risks and rewards that come with entrepreneurship. One of the most important lessons I've learned is the importance of having a solid business plan.
A business plan is a blueprint for your business. It should include financial projections, a clear understanding of your target market and competition, and a strategy for making money. Without a clear plan, your business may struggle to succeed in the long term. A solid business plan can help you stay on track and make smart decisions as you grow your business.
Before starting any business, it's essential to ask yourself some critical questions. These questions will help you to determine whether the business you're considering is viable for your level of experience and skill set. Some questions to consider include:
Do I have experience working in this industry?
What are the costs of starting this new venture?
Who are my competitors?
How long will it take to reach profitability?
Is it scalable and sustainable?
Is the business model better for online or bricks and mortar?
If it's a brick and mortar business, how much rent can I expect? How much space do I need?
How much do I need for initial and ongoing marketing?
Do I need to hire others to do marketing, adding additional costs to what is needed?
How much working capital will I need for the first 6-12 months?
How many employees will I need?
These questions are just a starting point, but they're crucial to understanding the financial investment required to launch and sustain a successful business. If you're starting an online business, the same questions need to be asked, but certain expenses will be less. For example, you may not need to rent a physical space, and marketing costs may be lower.
One of the biggest mistakes I have made and I see new entrepreneurs make is underestimating the financial investment required to start and sustain a business till profitability is reached. It's essential to have a clear understanding of the costs associated with starting your business, including rent, equipment, inventory, marketing, salaries, and benefits. Although an online business requires less capital it still requires the same due diligence in your research. Without a clear understanding of these costs, you may find yourself struggling to keep your business afloat.
Another critical factor in the success of any business is the ability to differentiate yourself from your competition. Researching your competition can help you to identify their strengths and weaknesses, which can give you an edge in the market. It's essential to understand what sets your business apart from others in your industry and to use that information to create a clear and compelling value proposition for your customers.
When I started my first business, I became partners with the people I worked for, which was a natural progression from my position as a store manager. The main benefit of this partnership was that I didn't have the burden of having to finance the business. I was the working partner that received equity as part of my compensation. My former bosses tried to take advantage of my lack of experience by offering me 10% of the business. I refused to accept their initial offer and wound up receiving 30%. This was another lesson learned in how to negotiate when you value your own talents.
The key to my success, regardless of my failures, has been perseverance. Perseverance is a trait that most successful entrepreneurs share, and its essential to staying the course when times get tough. Building a successful business requires a lot of hard work, dedication, and patience. It's important to remember that success rarely comes overnight, and it may take years of hard work and persistence to achieve your goals.
One of the best things you can do when starting a business is to find a mentor. A mentor can provide you with valuable insights and guidance, which can help you to avoid common mistakes and achieve your goals more quickly. Additionally, a mentor can provide you with emotional support when times get tough, which can be invaluable when you're starting a new business.
Mentorship has been a key factor in the success of many entrepreneurs, including myself. In fact, a study by Sage found that entrepreneurs who received mentoring were five times more likely to start a business that lasted for five years or more compared to those who didn't have a mentor. This statistic alone emphasizes the importance of mentorship.
A mentor can help you to navigate the challenges of starting a business by sharing their experiences and providing you with advice on how to overcome obstacles. They can also help you to identify your strengths and weaknesses, and provide you with guidance on how to capitalize on your strengths and address your weaknesses.
In addition to providing valuable guidance and support, a mentor can also help you to build a network of contacts in your industry. This network can be instrumental in helping you to establish partnerships, find investors, and grow your business.
When looking for a mentor, it's essential to find someone who has experience in your industry and who shares your values and vision. You want to find someone who is passionate about what they do and who is willing to invest their time and energy into helping you succeed. This person should also be someone you trust and respect, and who is willing to provide you with honest feedback, even if it's not what you want to hear.
While mentorship can be incredibly valuable, it's important to remember that ultimately, the success of your business is up to you. A mentor can provide you with guidance and support, but it's up to you to take action and make things happen. This means being willing to take risks, make mistakes, and learn from your failures.
It's also important to be open to feedback and criticism. Your mentor may provide you with feedback that challenges your assumptions or forces you to rethink your strategy. While this can be difficult to hear, it's important to remember that your mentor is providing this feedback because they want to see you succeed. By being open to feedback and willing to make changes, you can increase your chances of success and build a stronger business.
In conclusion, starting a business can be a challenging and rewarding experience. To increase your chances of success, it's important to have a solid business plan, understand the costs associated with starting and sustaining a business, differentiate yourself from your competition, and persevere through the ups and downs of entrepreneurship. However, one of the most important things you can do when starting a business is to find a mentor. A mentor can provide you with invaluable guidance and support, help you to build a network of contacts, and increase your chances of success. By approaching mentorship in a professional manner, being open to feedback, and taking action on the guidance you receive, you can build a stronger, more successful business.
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