Your Entrepreneurial To-Do List
Run down this checklist before you start your own business.
I'm often asked by would-be entrepreneurs and startup business owners what skills and abilities they need to develop to truly succeed in business.
That's always a tough question for me to answer. I've always figured aspiring entrepreneurs needed to learn as much as they could about everything and anything that had to do with business in order for to really achieve.
That said, there are two main skills you need to cultivate and acquire to be a great entrepreneur along with five others you need to focus on to really give you a sense of what it's like to successfully run a business:
- Become a generalist. While there is a drive toward specialization in every area of our lives, the person who commands armies is called a General. Being a generalist allows you to have a lot of flexibility as a business owner. It means you have to know the fundamentals of how business works, as well as how all the independent parts work together to create success.
- Know the numbers--yours and everyone else's. Numbers are a great and can be a great motivational force in your business and your life. Numbers are also the language of business, so you'll need to become fluent in them and familiarize yourself with a number of different formulas and key benchmarks if you want your business to be successful. What are some key numbers you need to know and learn?
You should start by knowing the size of your targeted market, the number of companies currently competing in that space, the types of revenues they are generating and the kind of profit margins they are currently running.
Also remember in any startup, expenses are usually 30-35 percent more than expected and revenues are always less than planned. Adjust accordingly and be prepared to alter your plans if the numbers don't add up.
- Treat your day job like an apprenticeship to being an entrepreneur. Your best ally in your current position is time. Use it to leverage your knowledge of what works (and what doesn't), and learn as much as you can about what drives sales and profits, because those are lessons you can use at some point in the future.
What can you learn in your current position that will help you down the road? What don't you know about your current company's operations that you could learn in terms of sales, marketing or accounting that could broaden your understanding of business generally?
- Work more jobs. Would you open a restaurant for the first time without ever working in a restaurant? Maybe you wouldn't, but I've had clients who did. And the results weren't pretty. To avoid this fate is find ways to work in the type of business you are thinking of starting.
Besides, who do you think would bring more experience to their particular enterprise: The person who only worked one job in one industry, or the person who worked in 20? Business, at its core, is a numbers game. The more you can make the numbers work in your favor, the better your chances of success.
- Learn the value of systems. Systems are the key to creating better and more profitable businesses. Until you can learn to systemize fundamental processes, you'll forever be reinventing the wheel--be it in your current job or in your business.
This can take the form anything from a script for answering phones to your overall sales and marketing processes. While these are vital to understand and key to success, it's also important to get familiar with hard systems and technical systems like phone systems and IT and internet configurations.
- Get good at sales. In business, nothing happens until a sale is made. If you are the owner of the company, you will be expected to generate sales. Sure, you can hire out this function but my experience has shown me that at least initially, your customers are going to want to first buy from you.
- Learn the rules. You can't play a good game if you don't know the rules or the objective of your game. So get some grounding in the legal aspects of business, forming your own business, local tax codes and licensing requirements and jurisdictions.
This is especially important for of home-based businesses and professional services firms. Some states and municipalities have rules against operating companies out of a home, or have special requirements and tests to sell accounting, legal or financial services.
While there are a number of other things you need to learn and adopt to succeed in business, these seven are a good place to start.
There are few truly new things under the sun. So build on the intellectual capital of those who have gone before you.
And it's more valuable now than ever before.