So, you had a great idea that you managed to turn into a business. You have a few partners-in-crime, your product has launched and maybe you even raised some money. But now what?
If you are starting your first business, you may feel a little lost when it comes to maintaining your personal drive and helping your company gain momentum. Here are six lifesaving tips to give you some direction and inspire you to move your big dream forward.
1. Make connections.
Building your entrepreneurial network is vital to growing your business. By connecting with fellow entrepreneurs, you can build supportive relationships with people you can ask for, and give, advice and help. Ultimately, they help you gain influence both inside and outside of your industry.
Mutually beneficial relationships with other business leaders will keep you top-of-mind when they discover opportunities they know may interest you. Jonathan Long, founder and CEO of Market Domination Media, suggests several ways you can connect with other entrepreneurs:
- Reach out via Twitter.
- Affiliate yourself with a professional organization.
- Enlist existing connections to help you network.
- Create a meetup group.
- Meet others via a coworking space.
2. Have a good business model.
According to serial entrepreneur and venture capitalist David Skok, one of the main reasons why startups fail is business model inadequacy. In particular, many entrepreneurs underestimate the difficulty of acquiring and monetizing customers. Thus, too much time and too many resources are spent attracting customers, which leads to funds depleting quickly.
To make sure your business model is solid, Skok suggests following two main rules. First, the “CAC/LTV rule” dictates that the cost of acquiring a customer (CAC) must be less than the lifetime value of a customer (LTV). To determine CAC, divide the cost of sales and marketing during a set period of time by the number of customers that you acquired during that time. For LTV, “look at the gross margin associated with the customer (net of all installation, support, and operational expenses) over their lifetime.” Second, the “Capital Efficiency rule” states that CAC should be recouped in 12 months. That way, your company will not be in the hole for a disproportionate amount of time.
Related: How To Write A Business Plan
3. Educate yourself continuously.
Always stay informed about the newest trends and developments in your industry. It is easy to focus on the daily grind, but go outside your comfort zone by attending workshops, seminars and other learning opportunities. These will add insights and perspectives about your business and the direction you want it to go. Keeping new knowledge fresh in your mind will also ensure that you consistently have innovative ideas to bring to the table.
4. Make sure someone actually wants your product.
Based on an analysis by venture capital database provider CB Insights, 42 percent of startups meet their early deaths because there was no market need for their product. Plain and simple, you can’t keep hoping that your business will grow if no one wants to buy your product. To ascertain whether your product -- in its first or twentieth iteration -- will be embraced by customers, try employing the principles of design sprints. First, lay out all the knowledge about the problem your product is attempting to solve. Then, come up with alternative solutions. Decide whether your product is the best solution. If at any point in the process you feel that your product is not fulfilling a market need or is otherwise deficient, then prototype and test out a new idea.
5. Take customer feedback to heart.
While it is important to stick to your guns when building and developing your business, always gather feedback from your existing customers and consider it earnestly. As Triin Linamagi, co-founder and brand strategist at creative digital agency Bahoui, wrote, “When you don't validate your market aggressively enough, you can’t build a good product. Without measuring, trusting the numbers, tracking, validating, and optimizing the data you get from your clients, it’s not possible to create a viable product in high demand.” Take the time to know your audience and fulfill their needs while staying true to your mission.
6. Have fun!
Perhaps the most overlooked but essential part of being a first-time entrepreneur is having fun. Get excited about even the most mundane tasks. Be enthusiastic about the work you have left to do, and do not forget to celebrate the small wins. Creating a business can be challenging, but if you enjoy what you do, then no setback can be too large.