We certainly live in the most entrepreneurial era since the inception of humankind. Starting a new business endeavor gets more prominent thanks to mass media, startup accelerators, venture funds, and digital opportunities to launch quickly.
The premise of “being your own boss” is a tempting solution to giving entrepreneurship a shot.
How to Run a Business?
The entrepreneurship wave combined with the demanding millennial rules of freedom and results-driven business models will break the norm in the corporate world over the next decade or two. Entrepreneurs need to know how to join progressive organizations and handle separate departments using shared funds and resources.
Taking advantage of the resources and ever-changing and growing technology will ensure growth and success in entrepreneurship, along with a few other essential things.
After going through a number of years of grinding, I had to compile my experience into a book to help future entrepreneurs understand what makes a business successful.
My book, 126 Steps to Becoming a Successful Entrepreneur is packed with practical lessons that I have gained the hard way and learnings I have accumulated throughout the journey.
Preface On Entrepreneurial Challenges
Entrepreneurship is hard. It eats up a ton of time and requires diverse expertise in a wide set of fields – from starting a business and product/business planning through sales and marketing, customer support and building partnerships, to legal and accounting challenges, hiring, scalability, growth planning.
But it’s just the way it is. It’s hard and successful entrepreneurs are simply putting the time and effort into building a solution that serves the right market.
New entrepreneurs are often fooled by media and the projection of successful entrepreneurs 5–10 years into their successful venture. They often fail to recognize the challenges that entrepreneurs face during the first 2, 3, 5 years of their journey.
Mashable and TechCrunch talk about all the cool startups that came out of nowhere and generated millions within the first 6–12 months. They discuss investments worth hundreds of millions and success stories by unicorn startups.
That represents less than 0.1% of the startup ecosystem. In the real world, entrepreneurs work their butts off to ensure they can survive through the feast and famine cycles and recruit safely while unpaid invoices keep them up at night.
It’s a Constant Struggle
Everyone else hustles hard and tries to survive. Entrepreneurs max out their credit cards and beg their family and friends for loans. They put in 100 hours a week for months or over a year. They sleep in their parent’s basement, on a couch with friends, or at their office if they really need to rent one.
Whenever they aren’t sleeping, they jump between improving their offering and cold-calling or meeting prospects. They push hard and try to generate some sales as soon as possible.
Even if they manage to do so, it’s usually not enough. It may take over a year to break even while some manage to achieve that in 2–3 years time. Note that revenue doesn’t mean profitability – your expenses may exceed the capital injected by the first clients.
As long as you’ve validated your product-market fit, it’s a matter of blood, sweat, and tears. At some point, you’ll break even and start generating some revenue. You may be able to afford to hire some folks or apply for an investment.
It won’t get easier but it would extend your lifeline until you really get some traction and become comfortable. Once you get comfortable, it’s likely that a smaller team has come up with something even more brilliant or a BigCorp has decided to enter your space. So you jump back on the drawing board and find out how to beat them as soon as possible.
It’s a constant roller coaster and there are tons of ups and downs. Good entrepreneurs are smart enough and know their market as the palm of their hand. Even with competition breathing down their necks, they can launch new exciting features, upsell their existing contracts, or find ways to automate their internal workflow for higher efficiency.
Those who are not ready will likely give up in 6–12 months. Everyone else will keep hustling until they finally get enough money in the bank which would let them work hard but more strategically, still trying to keep the growth and expand further.
Here are the 8 things entrepreneurs need to know about running a business and landing customers.
1. Having a Strong Foundation
I always recommend young people eager to start their own business to spend a few years working in other companies first. At the very least, there are a lot of valuable business practices that you can pick up – building a company culture, obeying deadlines, respecting the work of others, and many more.
Most businesses in the enterprise tier is done through:
- Strategic partnerships.
- Long-time networking with the right stakeholders.
- A notable business success that seems attractive to enterprises.
If this is your very first business (given the lack of office job experience), jumping straight to large enterprises may be tricky.
Enterprises have complicated processes, expensive onboarding, long sales times. Your best option would be building a freemium product. This could be adopted by some enterprise staff members or pitched directly to them with a “risk-free involvement”.
2. Availability is Imperative
Availability was a major life hack during the first 3–4 years in business.
Mon-Fri, 9-to-5, everyone happens to be around. Even across time zones, this usually means that weekends are extremely slow.
So I kept a close eye on any RFPs sent on a Friday night or over the weekend. Responding immediately and even jumping in to solve a critical problem made a real difference in establishing the brand as a reliable vendor. Same goes for bidding whenever everyone is asleep or chilling.
It’s just one of the dozens of factors you can really excel at. All of them require sacrifices but hey, that’s what business is about.
3. Wearing Many Hats and Working Harder Than an 8-5
When talking about entrepreneurship, people are tempted by the idea of:
- Being their own boss.
- Working whenever they feel like it.
- Earning 10x or 100x their regular salary.
Yet, there is more hard work than a luxury to becoming an entrepreneur.
Entrepreneurship is about taking risks, solving new business problems, working directly with customers, selling, marketing a solution, dealing with financial reports and legal cases, building a product that ends up being maintained by a small team turned into a company which keeps growing steadily. It takes time, money (capital), and effort to venture into entrepreneurship. It’s more exhausting and outright stressful as compared to a regular job.
4. Gaining Exceptional Skills
Think about sales, marketing, legal details around starting and running the business, managing finances, sorting out your branding identity, running a software toolset or a web platform for marketing and automation. Or any form of soft skills.
Some people (such as the tiny percentage mentioned earlier) may be fast-learners and capable to get the basics right from the start. But, likely, you don’t have enough established and proven working patterns due to lack of experience.
Most verticals that a business owner has to leverage are vaguely defined. You know that you have to market and sell, but there are thousands of approaches you can tackle (and just a few that would work).
Business experience (working in a few organizations and observing your managers’ behaviors, as well as the company policies and direction) helps a lot to identify some strategies that work and those that fail. This is invaluable since it’s not your money on the table experimenting with every idea you come up with.
Also, your network (colleagues and management) is likely to be more experienced – already having tried some of those strategies earlier.
5. Continuous Learning
Passionate young entrepreneurs can get better through endless reading, experimentation, and flexibility in adjusting their business model until they find the right product-market fit. There are plenty of resources on entrepreneurship, marketing, sales, product development, hiring, management, leadership – such as books, podcasts, webinars, blogs.
Most of those best practices are still subjective and contingent on various factors like location, industry, types of products or services.
Finding a Mentor
A good workaround to make your business successful is finding a great mentor or working with consultants once the business starts getting traction. This usually helps, thanks to tips and strategies tailored to your specific solution. It doesn’t discard the learning phase – but it’s the one thing that is explicitly related to your particular case (which is often different than others).
Another complementary approach is the reverse-engineering best practices from other competitors on the market (especially the smaller ones at the beginning). During a careful discovery session, it may outline various areas that would increase your traffic, sales, or user base accordingly – such as relying on particular social media networks, focusing on specific keywords for your content, and optimizing your content and marketing channels based on established industry practices.
Basically, people who are ready to start their own businesses would benefit from entrepreneurship resources. Those who have already decided to jump right in, who are often clueless in various areas, looking for help on forums, via available resources, and experimentation through their target audience and first prospects are most often helpful.
There is still a tiny portion of inexperienced business owners who pulled it off right off the bat. It was mostly luck combined with the right logical attitude and understanding of the landscape – which is a form of gift to some extent.
6. Strategizing Your Initial Sales and Client Acquisition
I would suggest four alternatives that still work in 2020.
A Freemium Application
Going freemium may attract smaller businesses and different types of customers that would testify for you in your portfolio.
Freemium products also attract media attention – different roundups and “Best of” blog posts that you can arrange with bloggers and magazine owners.
It’s a good opportunity to present your product at conferences without being too salesy as well.
Target Small Enterprises First
Smaller enterprises may be more open to giving your product a shot. Some definitions of SME define that as businesses with 50–250 employees which aren’t too shabby but definitely overcome some of the stress compared to dealing with a 10,000+ person organization.
Closing several small or medium enterprises and validating your product may be a good bridge between your startup and larger enterprises.
A Business Co-Founder
Since plenty of deals are closed through former partnerships or generally people who had worked together previously, bringing in an experienced co-founder with enterprise experience may be a good idea.
This would also overcome the age problem that you’re worried about. Someone with a solid track record in an enterprise can handle negotiations and tackle objections more confidently.
Some of the enterprise deals that we’ve closed over the years (a couple of banks, the aircraft industry, Audi) were brought by companies that we’ve partnered up within different capacities. For example, we’ve been working with Audi since 2015 through their branding agency.
They published an RFP for a large partnership platform that we won together with our partner. Attending the right industry events and growing your network steadily may be a good way to meet the right people who could introduce you to decision-makers working in enterprise organizations.
7. Building a Capable Team
It’s worth asking how large your team is? If you’re a solopreneur, ensuring stability, reliability, and support would be extremely challenging. Enterprises often demand specific SLAs that require 24/7 support, VIP support numbers, regular meetings, and other aspects that are subject to a lawsuit if you fail to deliver.
That’s not a hard requirement but often is an important factor.
Lacking production expertise, you may also fail to handle the expected load (data volume, concurrent users, security restrictions and capability management, traffic load during ad campaigns).
8. Maintaining and Nurturing Your Business’ Entrepreneurial Spirit
Ask yourself: what is the core of the entrepreneurial spirit?
- Are you the tree of inspiration?
- Or the company?
- Or the founding team along with the first few team members?
The so-called “entrepreneurial spirit” should be defined early on. Since it’s not quantifiable, you need measurable points that are subject to goals – ones you can incorporate in your culture, business goals, and KPIs.
If the hustling vibe is triggered by excessive growth, keep growing at the right pace which keeps your peers engaged without burning out.
Now, if innovation is the key, always keep a healthy and motivated R&D team on staff and invest in the corresponding areas of the business.
Lastly, if cash flow is what moves you forward, hire a sales army and automate certain processes for maximum margins.
At some point, you will need “workers”. Those would be the 9-to-5 folks who won’t care as much about the company policy or the altruistic views of the founder.
But if you’re genuinely interested in saving the entrepreneurial spirit, keep the core element of the equation, nurture it, grow it, and maintain it.
You may want to keep the heartbeat going through different in-house activities. The HR department may be instrumental here in organizing company events, workshops, and internal meetings showcasing success.
The Bottom Line in Starting a Business
I can think of a small number of instances where starting a business right away would make sense:
- The business is fairly straightforward – such as starting a lemonade stand in the backyard or delivering newspapers door-to-door.
- You offer a form of service that doesn’t require qualification – such as basic administrative work or office assistance.
- You happen to have a hungry market surrounding you in a need of something you can offer.
- There are co-founders with you who need a busboy for the operative and administrative work until you learn some specific skills.
- Your background is ideally suited for some form of business – such as travel blogging or teaching SAT classes.
Finding a great bunch of people to push you further is always helpful. Your co-founders or senior managers are the obvious choices. Demanding clients are stressful but usually come up with solid suggestions. Monitoring competition and latest trends through the lens of critical thinking can help you, too.
You don’t have to be the smartest person in the world in order to found a company. 35% of the US workforce now comprises freelancers. A lot of people venture into entrepreneurial activities – selling products, providing unique consulting services, handling ongoing support for a given solution.
Elon Musk nailed it when he said this about being an entrepreneur: “If you need inspiration, don’t do it.”
Get a copy of the book 126 Steps to Becoming a Successful Entrepreneur on Amazon today to study my guide on hitting your business goals and achieving success.