Startup Basics: How to Master the Fundamentals
If you've ever played sports or done any sort of training, you know how important it is to master the fundamentals. You might have even had a coach or teacher who emphasized the "fun" in "fundamentals" to encourage you to enjoy the preparation and practice needed to succeed.
The same goes for business. But there is so much information these days that it's sometimes hard to focus on the few simple basics you need to make your startup a success.
Some entrepreneurs fall victim to what I call "chasing the new." They're looking for a new angle or magic bullet that will solve all their issues. But in the end, there is no magic bullet. There are just proven principles you need to practice and master to get your business up and growing--and keep it successful.
Here are some of those fundamental principles and ways to master them:
1. Know where you want to go with your company--and why you want to get there.
If you know where you're going on an automobile trip and why you want to get there, it's a lot easier to stay motivated and focused on your destination, even if you break down or get a flat.
Similarly, a compelling vision will guide you when times get tough and will help rally your customers to your company. So ask yourself early and often where you want to go with your business--and more important, why?
Once you set the vision for your long entrepreneurial journey, you can establish specific business goals and break them down into plans, actions and tasks. You'll surprise yourself with what you can accomplish by "chunking" down big and seemingly unattainable projects into tasks you can work on every day.
You'll also be amazed by how much you can accomplish in the next five to 10 years with a solid vision of where you're going and how you're going to get there.
2. Business can't exist without revenue, so learn how to sell.
We've all seen it a thousand times: A company has a great logo, business cards, letterhead and office space, but very little to show for it in terms of customers and sales.
Every business, of course, needs customers, and until you get them, you don't really have a business. That means you need to learn as much as possible about selling and getting repeat business after your first sale.
If you're a so-called born salesperson, that's great. But you still have to make sure you're selling at a price point and margin that will guarantee success and that you resist the inclination to discount just to drum up sales.
This is critical even for well-established companies. But it's even more essential during startup mode because your first goal should be to generate as much cash flow as quickly as possible.
3. Sell what people want to buy.
We've also seen many companies looking to break ground in a "new" or untested market, only to discover there really isn't a market after all or they're competing for a very small slice of a very small pie.
To avoid that problem, think in terms of large categories first. For example, most people already buy shoes, clothes, technology and entertainment, but they're willing to purchase even more if the right product or service comes along. Profitable new niches are typically found by drilling down into such already successful categories.
So start big, then get narrow. You'll generally discover more opportunities than if you did it the other way around.
4. Create cash flow first, then profits.
I'm a big proponent of profit, but first you first need to establish consistent cash flow.
Some owners get infatuated with systems or team building, and that's fine, as long as it's a system for generating cash flow or development of a team to produce it.
If you want to build other systems, you can. But get cash flow first. If you want to build great teams, you can. But get cash flow first.
If you want bigger profits, get more consistent cash flow.
Finally, just decide to do it. All your visions, dreams, goals, plans and projections are only as good as the action and effort you put into them.
And beware the temptation to "chase the new." Instead, get comfortable learning to apply the basic principles that will get you where you want to go. You'll discover your old coaches and teachers were right: There is "fun" hiding in the "fundamentals."