Starting a Business – Definition, 8 Things To Know Before, and More
Starting a Business Definition
Starting a business entails understanding and dealing with many issues—legal, financing, sales and marketing, intellectual property protection, liability protection, human resources, and more. But interest in entrepreneurship is at an all-time high.
And there have been spectacular success stories of early-stage startups growing to be multi-billion-dollar companies, such as Uber, Facebook, WhatsApp, Airbnb, and many others.
8 Things To Know Before Starting a Business
Entrepreneurship can be a challenging game. Almost no college or university level education can prepare you for it. Most of the learning happens on the job.
When I started my first business way back in 2004, little did I expect the journey to be this brutal? Here are some lessons I wish I knew when I first started.
1. Money is Important but not Enough
- Many entrepreneurs manage to raise capital early in the game, but money is not enough. A sound business model that generates consistent cash flows is essential.
- Besides, you need people to implement your systems.
2. Focus on People and their Needs
- Business is all about people. You can’t do it all by yourself. Focus on people, understand their needs, compensate them adequately, and invest in their training.
- They may or may not stay with you, but it’s essential to train them continually.
3. The owner is Separate from his Business
- It’s essential to separate yourself from your business and look at yourself as an employee and shareholder in your industry.
- I’ve seen that many people struggle to differentiate their finances from that of their business.
4. Choose the Right Business for you
- Sometimes, the difference between success and failure can be just choosing the right business for you.
- There are times when no matter how much you try, things won’t work out because market conditions are not in your favour.
- For example, most airlines in most countries have a profit margin of less than 2%, and most airlines, even though competent people run them, don’t make money.
5. Maintain a Strong work-life Balance
- I see a lot of entrepreneurs spend 12 to 13 hours a day in their business. And they’ve been doing it for over 10 years.
- This eventually causes them to burn out and become unproductive. When you start working fewer hours, you find ways to streamline your operations and get things done faster.
- Nowadays, there are a lot of apps that can help you become more productive.
6. Start Saving Early
- I was never really a big spender. However, I rarely bothered to save money early in my life.
- If you start saving early, you can use your savings to invest in your business. Savings give you options.
7. Learn to Manage Debt Better or Stay out of it
- Some entrepreneurs use debt to start a business. This can be very dangerous, especially if you are a first-time entrepreneur. A start-up is inherently very risky, especially if the business model is untested.
- If the business fails, the business owner still needs to pay back debt because the business owner guarantees most obligations.
- Some entrepreneurs use home loans and personal loans to start a business because interest rates on these loans are low.
- However, be very careful, less optimistic, and make sure your debt is within manageable limits.
8. Find a Good Mentor
- Having a good mentor is like parental guidance. You want someone to hold you accountable for your actions and provide advice through your journey.
- But choose your mentor wisely. Ideally, it should be someone who has a strong track record of business success, believes in your idea, and is willing to give you honest feedback without worrying about protecting your feelings.
Starting a business can be very exciting. But it’s important to do your homework and take measured, meticulous steps. Start small and take incremental steps one day at a time.
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