Basic aspects of entrepreneurship, we want to present a basic guide of to-do’s when becoming an entrepreneur.
A Crash Course in Entrepreneurship: 7 Concepts You Should Know Before Starting a Business
No one ever said becoming an entrepreneur was easy. But with the wealth of information at our fingertips and cutting edge technology it is easier than ever to beat the odds.
If you are reading this article you likely already have a product or an app idea. What this article aims to accomplish is to fill in the gaps. To get you from merely an idea to a rock solid foundation on which to build your first business.
It all starts with having the right mindset
Working with entrepreneurs is always interesting. You are constantly working with different personality types, varying levels of education, and a very diverse set of skills. Yet one trait above all others stands out when meeting truly successful entrepreneurs: grit.
Angela Duckworth (NYT Bestselling Author of Grit: The Power of Passion and Perseverance) defines grit as “passion and perseverance for long-term goals.”
Starting something is never enough for a gritty entrepreneur. They must have the ability to persevere and be resilient in the face of adversity and uncertainty. To see their idea through to the very end.
There’s no time to fall into analysis paralysis. The gritty entrepreneur must jump in and learn as they go. They must be a little stubborn and extremely goal oriented to get the job done.
Research and Understanding Your Market
Before taking the leap into your market it is always important to take a minute to analyze the market, create a hypothesis, and test it.
The first step is creating a buyer persona for your product.
With a buyer persona you can answer the question: Who is my ideal customer?
Who are they, what are their demographics, where do they gather, and what is their story are all questions you should answer to create this fictitious version of the perfect customer.
This exercise will help you get in the right mindset of your buyers so you can create real value and the right products to solve their problems.
Understanding Your Why
Simon Sinek is famous for his wonderful book and TED talk on figuring out your why.
He explains that every company can tell you what they do. Some companies can even tell you how they do it (what differentiates them from their competition).
But very few companies can tell you why they do what they do.
He isn’t talking about making a profit because that is a result. He is talking about your cause and your beliefs.
What gets you out of bed in the morning?
Why does your organization exist?
And why should anyone care?
The truly inspired people and organizations all think about their why first. Because as Simon says “people don’t buy what you do, they buy why you do it”.
If you don’t know why you do what you do then how can you expect people to ever buy from you? Or more important, be loyal?
Financing and Taxes
In most businesses cash flow is king. Figuring out how you will finance your company is crucial to your long-term success.
Making the decision to bootstrap, raise capital, or take on loans is a decision every entrepreneur must face. The right or wrong answer depends greatly on your personal finances and tolerance for risk.
The next big decision to make is what structure your company will take. While many entrepreneurs start as a sole proprietor it is definitely worth looking at creating an LLC to create some sort of protection between your business and your personal assets.
An investment well worth the cost is find a good local CPA. Not only can they help with deciding the proper tax structure for your business but can also advise you as to how much money you should set aside for taxes each year.
Protecting Yourself and Getting Paid
Another often overlooked aspect of starting your own business is protecting your work and getting paid. Getting paid the right amount and on time can sometimes be a challenge.
Protecting yourself is a top priority and depending on your business may require contracts, payment terms, and clear agreements between you and your client. Protection can come in many forms but the most common is creating a Statement of Work or Scope of Work which outlines payment terms, timeline of deliverables, and clear expectations of both parties.
Companies like DocuSign and DocHub can make sending, signing, and receiving contracts electronically very simple, timely, and straightforward.
MVPs and Outsourcing
Reid Hoffman (the founder of LinkedIn) has a popular saying “If you are not embarrassed by the first version of your product, you’ve launched too late.”
Creating a minimum viable product (MVP) to launch sooner than later is crucial to gathering much needed feedback from actual users without spending too much money up front.
Another key concept to launching an MVP is to delegate and hire expertise where needed.
If app development or design work is out of your realm then either delegate it or hire a company to do it for you. Focus on your strengths rather than creating stronger weaknesses.
When hiring outside your company for various tasks it is often tempting to hire the lowest bidder for your outsourcing needs. With that Caveat Emptor (buyer beware) definitely applies.
More often than not you get exactly what you pay for.
Don’t get caught up thinking you need to cut costs everywhere. If your idea is an app for example then don’t skimp on hiring a good development company. Cut costs in other places like working from home or coffee shops instead of getting a lease or a coworking space.
Sales and Marketing Strategies
The hardest part of the entrepreneur journey is actually finding customers. Often we get caught up in the specifics of the actual product and don’t realize we need a concrete plan for getting paying customers.
Cold calling and cold emailing is far from dead and in all likelihood you will be using those tactics often your first year in business. Getting your first customers is everything.
Another skill you may not have known you would need is writing. Creating content for blog posts, writing compelling sales copy, and even crafting the perfect email pitch is all part of the entrepreneur’s tool kit.
These skills should be sharpened through lots of practice, coaching, reading, and listening to podcasts. Through thousands of calls, emails, and pitches you will create your True Fans as Kevin Kelly calls them.
Gary Vaynerchuk is famous for saying “You are a business person first and an artisan second.” So be sure to act accordingly.
What other skills and traits make up a successful entrepreneur?
Tell us in the comments below.